AUD/USD: Eyes yearly high above 0.7800 despite mixed clues, off in China

• AUD/USD battles five-week-old resistance line near the highest since January 21.
• Biden-Xi call, US stimulus progress and virus woes troubled markets.
• Aussie-US data, EU’s economic forecast and holiday in Beijing and Japan increased traders’ confusion.
• Light calendar at home likely to extend sober trading conditions, risk catalysts keep the driver’s seat.

Despite keeping the latest pullback from a three-week high, AUD/USD wavers around mid-0.7700s, picking up bids to 0.7760 off-late, amid the early Friday morning in Asia. In doing so, the aussie pair struggles to offer a decisive break above near-term key resistance amid mixed signals from risks and the economic calendar amid off in China.

Too much noise but nothing could move markets…

Following better-than-expected Australia Consumer Inflation Expectations for February, AUD/USD rode through the first phone call between the US and Chinese leaders as well as upbeat vaccinations and virus headlines to end Thursday on a positive note.  Also important was downbeat US Jobless Claims and pessimistic economic forecast by the European Union (EU).

Australia’s Consumer Inflation Expectations grew past-3.4% expected and the previous outcome to 3.7% in February. The upbeat Aussie data was in contrast to the US Jobless Claims for the week ended on February 05, 793K versus 757K expected. It’s worth mentioning that the European Commission revised down its 2021 GDP growth forecast to .8% from 4.2% YoY.

Elsewhere, US President Joe Biden and his Chinese counterpart Xi Jinping’s first call didn’t go well, even as China’s Global Times (GT) tried to paint a rosy picture out of it. US President Biden criticized China’s policies and Beijing warned Washington to not meddle in matters relating to Hong Kong, Xinjiang and Vietnam.

It should be noted that the latest updates over US President Biden’s anticipated $1.9 trillion covid relief stimulus suggest that the much-awaited stimulus should be done with by February, as signaled by House Speaker Nancy Pelosi.

Additionally, the coronavirus (COVID-19) cases have been receding but the fears of the variants and their faster spread challenges the mood.

Against this backdrop, Wall Street closed mixed even as Nasdaq refreshed the record top. Further, the US 10-year Treasury yields regained their place above 1.15% by the end of Thursday’s North American session.

Looking forward, a lack of major data/events at home and China’s Lunar New Year celebrations can keep the global markets choppy going forward. However, US Michigan Consumer Sentiment Confidence can entertain markets during Friday.

Technical analysis

The recovery in MACD and sustained trading above 21-day SMA favor AUD/USD to cross the immediate trend line resistance from January 06, at 0.7755 now, which in turn clears the road to the yearly top surrounding 0.7820. Meanwhile, a downside break of 21-day SMA, currently around 0.7695, can retest an upward sloping support line from March 2020 surrounding 0.7640.