- AUD/USD renews intraday top while snapping two-day downtrend.
- Turkey, Venezuela favor risk-on mood, Aussie PM declares national emergency due to floods in NSW.
- China inflation, RBA’s Lowe also contributes to the upside momentum.
- RBA’s Debelle should back Lowe’s cautious optimism to keep buyers hopeful, headlines from Ukraine are important too.
AUD/USD portrays the market’s cautious optimism, despite downbeat catalysts at home, ahead of Wednesday’s European session. That said, the Aussie pair prints the first daily gains in three, up 0.15% intraday around 0.7280 by the press time.
Ukraine’s retreat from NATO membership and confirmation of the first humanitarian corridor in Kyiv are the key catalysts to challenge the previous risk-off mood. Also positive for the sentiment, as well as the AUD/USD prices due to its risk-barometer status, is Venezuela’s freeing of the American prisoner and the US hint of easing sanctions afterward.
Though, doubts over Kyiv’s plans to join the European Union (EU) and Russian push for nationalizing foreign-owned factories that shut operations challenge market sentiment and test the AUD/USD bulls.
On the same line could be news from the Australian media ABC News saying, “Prime Minister Scott Morrison has declared a national emergency in response to catastrophic floods in northern New South Wales."
Read: Australian PM Morrison declares a national emergency in response to catastrophic floods
Against this backdrop, the US 10-year Treasury yields drop two basis points (bps) to 1.85% whereas the S&P 500 Futures remain firmer on a day at the latest.
It’s worth noting that upbeat prints of China’s inflation numbers and less dovish comments from RBA Governor Philip Lowe also underpin the AUD/USD pair’s latest rebound.
That said, the pair buyers will keep their eyes on the risk catalysts while also waiting for comments from RBA Deputy Governor Guy Debelle, scheduled for release around 08:00 AM GMT.
If RBA’s Debelle follows Lowe’s readiness to lift rates during this year, AUD/USD will have another reason to rise.
Technical analysis
Despite the AUD/USD pair’s latest rebound, the 200-DMA level of 0.7317 restricts the immediate upside of the quote. Meanwhile, pullback moves may aim for the 100-DMA and the 50-DMA levels, around 0.7230 and 0.7190 in that order.
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