AUDUSD appears indecisive around 0.6750 amid shift in risk profile
|- AUDUSD struggles for clear direction at the highest levels in two months.
- Mixed concerns over the rockets fired toward Poland, cautious mood ahead of the key data/events challenge momentum traders.
- US Retail Sales, Australia employment data will be closely observed for immediate directions.
AUDUSD grinds higher around the intraday top but stays mostly unchanged on a day as the quote seesaws around 0.6760 heading into Wednesday’s European session.
It’s worth noting that strong prints of Australia’s Wage Price Index failed to impress the Australian Dollar (AUD), as well as the International Monetary Fund’s (IMF) advice to the Reserve Bank of Australia (RBA) to increase the benchmark rates faster. The reason could be linked to the mixed concerns surrounding Russia.
Late on Tuesday, the news that two Russian-made rockets were fired at Poland and killed two people triggered the risk-off mood. The same triggered emergency meetings of the North Atlantic Treaty Organization (NATO) and the Group of Seven (G7), which in turn favored the US Dollar (USD) due to its safe-haven appeal.
However, the latest news shared by the Associated Press (AP) quoted an anonymous US official’s findings while mentioning that the missile may have been fired by Ukraine. As a result, the risk aversion ebbed and the greenback reversed the early-day gains.
Elsewhere, the US Treasury yields snap a two-day downtrend near 3.82% whereas the S&P 500 Futures print mild gains around the 4,0000 round figure, the highest levels in a month, which in turn should have favored the AUDUSD bulls.
Hence, the market’s inaction and mixed updates seem to challenge the AUDUSD traders ahead of the key Australian employment data and the US Retail Sales for October. That said, fears of strong US data and the odds of the Reserve Bank of Australia’s (RBA) softer rate hikes are on the table, which in turn keeps the AUDUSD bears hopeful.
Also read: US October Retail Sales Preview: US Dollar unlikely to find reprieve
Technical analysis
The 100-DMA challenges AUDUSD bears around 0.6700 whereas the September 2022 high near 0.6920 is the key hurdle to the north.
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