AUD/USD wavers above 0.7900 despite Australia’s exports slump, Powell’s testimony in focus
|- AUD/USD defies pullback from the multi-month high marked the previous day.
- Aussie Preliminary Trade Figures for January dropped, weekly consumer sentiment eased for third week, China’s monetary policy normalization on cards..
- Japan eyes to remove virus-led emergency in Tokyo and surrounding prefectures, US stimulus talks progress.
- Powell will be eyed closely amid mixed economics off-late.
AUD/USD stays in the choppy range between 0.7910 and 0.7922 since the start of Tuesday’s Asian session. In doing so, the quote pays little heed to the Australian preliminary trade numbers for January. The pair jumped to the highest since February 2018 the previous day but a lack of major directives and cautious sentiment ahead of the key event keep the quote on the sidelines.
Australia’s January month trade figures flashed downbeat data with exports dropping 9% and imports down 10%. Among the major countries, trades with the US and Japan are down the most.
Read: Australia preliminary trade figures for January, exports drop 9% MoM, AUD steady
Earlier in the day a third consecutive week of downbeat Consumer Confidence data from ANZ-Roy Morgan, from 109.9 to 109.2 recently, couldn’t move the AUD/USD prices.
It should be noted that the chatters surrounding Japan’s expected removal of virus-led emergencies from Tokyo and nearby prefectures should have helped the quote, amid risk-on mood, but failed off-late.
Also on the positive side were hints of China’s economic recovery and gradual scaling down monetary easing, as well as the US policymakers’ push for President Joe Biden’s $1.9 trillion covid relief stimulus.
However, strong bond yields keep the reflation fears on the card and tame the bulls ahead of Fed Chairman Jerome Powell’s bi-annual testimony. Although Powell is most likely to reiterate his cautious optimism, any surprises won’t be taken lightly.
Read: The Week Ahead: Inflation and the Fed
Technical analysis
Unless breaking below 0.7820-15 area comprising highs marked on April 2018 and January 2020, AUD/USD sellers are less likely to step-in. Meanwhile, February 2018 peak surrounding 0.7975-80 can offer an intermediate halt on the way to 0.8000 psychological magnet.
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