- AUD/USD holds onto recovery moves from multi-day low.
- Mixed concerns over China, virus and cautious mood ahead of key US data back the moves.
- DXY remains unchanged after refreshing monthly high, Treasury yields drop but equities trade mixed.
- RBA policymakers’ speech, second-tier Aussie data can entertain traders but US CPI will be the key.
AUD/USD seesaws around 0.7370, after rebounding from the month-start levels as Asian traders prepare for the key Tuesday.
While covid-led risk-off mood, fears of hurricane and typhoons and the Fed’s tapering talks weighed on the quote early Monday, easy geopolitical headlines and a lack of data/events allowed consolidation of losses afterward. However, the cautious sentiment before the US Consumer Price Index (CPI) for August seems to restrict the pair’s latest moves.
China’s growing assertiveness in diplomatic relations with the global leaders recently renewed market optimism. The same requires the White House to host a ‘Quad’ summit on September 24 with the leaders of India, Australia and Japan. Even so, the dragon nation’s crackdown on technology companies, recently on Ali Pay, probes the bulls. On the same line were the headlines concerning typhoon Chanthu and tropical storm Nicholas.
Adding to the list of catalysts were fears of the Fed’s tapering as the last week’s record US Producer Price Index (PPI) data and the early week comments from Philadelphia Federal Reserve Bank President Patrick Harker challenged the AUD/USD bulls. The Fed policymaker refrained from signaling what will the US central bank do in the next week but pushed for sooner tapering.
Talking about the COVID-19 levels, Australia registers an uptick in total cases to 1,751 versus 1,672 the previous day. Numbers from Victoria jump to the highest since July 2020 levels but chatters over 80% jabbing by October keeps AUD/USD buyers hopeful.
Amid these plays, US Dollar Index (DXY) closed unchanged on Monday’s North American trading, after refreshing the monthly top, whereas the US 10-year Treasury yields 1.5 basis points to 1.32%. Further, the Wall Street benchmarked closed mixed.
Moving on, comments from Luci Ellis is the Assistant Governor (Economic) at the Reserve Bank of Australia and Governor Philip Lowe will join the risk catalyst to entertain AUD/USD traders. However, the cautious mood ahead of the US inflation data, expected to ease in August, will be crucial as traders brace for the Fed’s tapering in the next week.
Read: US Inflation Preview: CPI critical for taper, three scenarios for the dollar
Technical analysis
Despite refreshing a fortnight low, 20-day EMA surrounding 0.7350 defends AUD/USD bulls from the last Wednesday. However, recovery moves remain doubtful unless crossing a convergence of 100-day and 200-day EMA close to 0.7460-70.
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
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.