- AUD/USD trims intraday losses after refreshing the weekly low.
- RBA jumped bond purchase amid global treasury yield rally, Aussie 10-year coupon rose to April 2019 top.
- Aussie Private Sector Credit Eased, S&P 500 Futures stays depressed.
- US stimulus talks, PCE data and bond moves will be the key.
AUD/USD bounces off intraday low to 0.7857 during the early Friday. In doing so, the quote also takes a U-turn from the weekly trough while consolidating the initial losses incurred due to the global Treasury yields havoc. Also favoring the pair bears was the RBA’s latest action and Aussie data.
Australia’s Private Sector Credit for January eased below 0.3% to 0.2% MoM whereas the YoY reading also fell to 1.7% from 1.8% prior.
RBA bought 3-year government bonds worth three billion Australian dollars to tame the Treasury yields that spiked to the highest in 22 months.
The bonds in Australia aren’t alone to witness the bears’ show as their counterparts in Japan, the US and New Zealand also poked multi-month top earlier in the day. However, the US 10-year Treasury yields steps back from the highest in a year, flashed the previous day, to mark 2.8 basis points (bps) of a decline to 1.493% by press time. The moves of the US 10-year Treasury yields seem to offer breathing space to the S&P 500 Futures that marked the heaviest drop in a month on Thursday.
It's worth mentioning that the US missile attack on Iran and House Speaker Nancy Pelosi’s update on the much-awaited stimulus fail to gain any major attention. Also being the risk news was the American push for China to follow the trade deal agreement and Beijing's dislike for US Navy's entrance in the South China Sea.
Looking forward, bond moves are likely to keep the driver’s seat and may exert additional downside pressure on the AUD/USD if today’s US PCE data suggests an inflation uptick. Also important would be anticipated voting on the US covid relief package in the American Lower House.
Technical analysis
The pullback from the multi-month high eyes 0.7820-13 key support area, comprising a three-week-old support line and highs marked during April 2018 and January 2021. However, bulls can stay hopeful to witness 0.8000 again on the charts. Though, its run-up beyond the latest top has a bumpy road before the year 2018 peak surrounding 0.8135.
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