AUD/USD: Bulls and bears jostle below 0.7400, Australia Q2 CPI, Fed eyed

AUD/USD remains sidelined, challenging the previous day’s fall, around 0.7360 during Wednesday’s Asian session. The coronavirus woes joined China’s crackdown on technology and private tuitions to weigh on the quote on Tuesday. On the same side were the pre-Fed caution and mixed US data, not to forget the deadlock of US stimulus and Sino-American tussles.

Having reported the highest daily infections since March, with 175 count, chatters over Australia’s New South Wales (NSW) to mark over 200 figure for the day are all around. The same will propel the national count to a fresh 10 month top while crossing the previous day’s 187 level. Additionally, Victoria officially exits the snap unlock but activity restrictions remain in place for the most of the state.

With the NSW outbreak pushing policymakers towards faster inoculation, Aussie PM Scott Morrison is up for a press conference around 11:00 AM Australia Time, the same when the leaders from South Australia (SA), Victoria and NSW will cross the wires.

On a different page, US-China tussles escalate over the American ban of Beijing diplomats’ visas as well as the US ties with Hong Kong and Vietnam of late. Furthermore, softer-than-expected prints of US Durable Goods Orders and housing numbers jostle the notable upward revision to the priors, as well as firmer US CB Consumer Confidence to weigh on the sentiment and AUD/USD prices.

Amid these plays, S&P 500 Futures track Wall Street’s losses, the first in six days, whereas the US 10-year Treasury yields consolidate recent losses around 1.23% by the press time.

Moving on, Australia’s Consumer Price Index (CPI) for the second quarter (Q2) expected 0.7% versus 0.6% QoQ and 3.8% versus 1.1% YoY, will be the key for AUD/USD prices for immediate direction. Should the inflation numbers meet optimistic forecasts, the quote may consolidate the latest losses to prepare for the likely drawdown post-Fed. Also important will be Aussie PM’s press conference as well as the second-tier US data.

Read: Federal Reserve Preview: Three reasons why Powell could pause, pummeling the dollar

Technical analysis

AUD/USD retreats below the monthly resistance line, around 0.7405, signaling another battle with the 0.7340 support on the way to the month’s low, also the lowest since November 2020, near 0.7290.