- AUD/USD struggles to defend corrective pullback from yearly bottom.
- Bears take a breather amid chatters over US Infrastructure bill, mixed virus updates.
- Local lockdowns could negatively impact Aussie Retail Sales, Westpac Leading Index for June.
- Qualitative catalysts remain crucial for near-term direction.
AUD/USD fails to overcome yearly low of 0.7299, currently around 0.7330 amid early Wednesday morning in Asia. The Delta covid variant woes and reflation fears keep weighing the market sentiment, despite mild consolidative moves in the US session amid stimulus concerns.
Delta covid strain defends policy doves…
With the virus variant spreading faster and challenging previous concerns over policy tightening, easy money is likely to stay here for long, which in turn should have offered an invisible hand to the market’s cautious optimism amid “same old”.
Also on the risk-positive side could be comments from US Senate Minority Leader Mitch McConnell who said, per Reuters, “Efforts to pass a bipartisan infrastructure bill in the Senate would not be slowed down if Democrats lost a procedural vote to begin debate on Wednesday.”
Meanwhile, South Australia joined the league of New South Wales and Victoria to be under the local lockdowns even as Aussie Health Minister Greg Hunt tweeted the arrival of one million Pfizer vaccines for Australians per week. On the same line, the UK’s unlock remains highly criticized as PM himself got in touch with an infected person, resulting in isolation, whereas the national daily numbers stay around early 2021 highs.
It should be noted that the escalation over the US-China tussles and mixed data from the US, recently soft housing figures, play a distant role. Also, RBA Minutes and the People's Bank of China's (PBOC) status-quo offered no motivation to AUD/USD traders the previous day.
Amid these plays, Wall Street benchmarks pared the previous day’s heavy losses and the US 10-year Treasury yields also rose, providing a bounce off multi-day low to the AUD/USD prices. However, the Aussie pair’s further advances depend upon Australia’s preliminary readings of June month’s Retail Sales, expected -0.5% versus +0.4% MoM prior, as well as Westpac Leading Index for June, -0.06% previous readouts.
While expected weakness in the economy may keep AUD/USD sellers hopeful, any improvement in the covid conditions and US stimulus talks may offer breathing space to the pair sellers.
Technical analysis
AUD/USD bears need a daily closing below 0.7340, comprising tops marked in September–November 2020 to October 2020 high near 0.7245. On the contrary, recovery moves require 0.7410-15 breakout, including late 2020 peak and early July 2021 low, to be considered promising.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.