AUD/USD pierces 0.7700 as S&P 500 Futures stay heavy near one-month low

AUD/USD stays heavy near the lowest levels since early February, currently down 0.37% intraday to 0.7698, during early Friday. In doing so, the risk barometer ignores the recently positive sign from China and New Zealand while respecting the broad US dollar strength amid a drop in S&P 500 Futures and sustained rally of the US 10-year Treasury yields.

Chinese Premier Li Keqiang recently crossed wires while saying, per Reuters, to target 2021 growth above 6.0%. Given the dragon nation’s close-knit trade relations with Australia, the news should have helped the AUD/USD prices.

Also on the positive side were the updates from New Zealand suggesting the downgrade in Tsunami alert level that was given to the North Island residents after witnessing three back-to-back earthquakes.

The reason could be traced from Italy’s blockage of AstraZeneca’s vaccine supply for Australia. Additionally, the extended downbeat performance of risk indicators like the S&P 500 Futures and Asia-Pacific stocks as well as the run-up in the US 10-year treasury yields and the US dollar index (DXY).

While checking the major blow to risks, the market’s reflation fears amid hopes of further fund inflows, due to the UK and the US stimulus, could be held responsible.

Considering the lack of major data/events in Asia, coupled with the cautious sentiment ahead of the US employment figures figure February, AUD/USD is likely to remain depressed ahead of the key US NFP.

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Technical analysis

With a clear break below an ascending trend line from November 2020 and 50-day EMA, respectively around 0.7755 and 0.7700 now, AUD/USD bears eye February’s low near 0.7560.