AUD/USD: Bulls keep the reins above 0.6900 ahead of Aussie Q1 GDP

AUD/USD rises to 0.6915, intraday high of 0.6923, amid the recently high risk-on mood in the market during Wednesday’s Asian session. In doing so, the Aussie pair probes the highest since January 16, 2020, amid risk-positive news from the US as well as upbeat Aussie PMI data.

Australia’s AiG Performance of Construction Index for May rose beyond 21.6 previous to 24.9 whereas Commonwealth bank Services PMI grew past-25.5 forecast to 26.9. Further, the Commonwealth Bank’s Composite PMI also crossed 26.4 prior with a 28.1 mark.

Other than the data, news from Axios that US President Donald Trump is stepping back from the earlier threat to use military power in full form to tame the riots seems to have boosted the market’s risk-on sentiment.

As a result, the US 10-year Treasury yields gain 1.5 basis points (bps) to 0.698% whereas Japan’s NIKKEI gains over 2.0% to 22,795 amid the initial minutes of Tokyo open on Wednesday.

It should also be noted that the US health official’s cautious optimism surrounding the coronavirus (COVID-19) vaccine as well as hopes of economic restart and weak US dollar also pleases the Aussie bulls.

Having said that, traders are gearing up for the first quarter (Q1) Australian GDP, up for publishing at 01:30 GMT. While forecasts suggest a drop of 0.3% in QoQ GDP figures versus the 0.5% previous expansion, any downbeat readings may give reasons to the bears to enter at multi-day high levels.

Technical analysis

A sustained rise past-0.6900 enables the pair to aim for January 16 top near 0.6935 ahead of targeting 0.7000 round-figure. On the contrary, overbought RSI signals a pullback towards the early-January low near 0.6850, a break of which can recall February tops near 0.6775.