AUD/USD prods bears above 0.6650 but lacks upside momentum ahead of US Durable Goods Orders

AUD/USD skates on thin ice around 0.6670-80 as it tries to push back the bears amid a sluggish week, so far, due to the lack of major data/events, as well as mixed risk catalysts. Also restricting the Aussie pair’s moves on early Tuesday in Asia is the cautious mood ahead of the US Durable Goods Orders for May, as well as Wednesday’s Monthly Consumer Price Index (CPI) for Australia.

Global markets dwindle as headlines from Russia suggest geopolitical fears aren’t off the table despite the Wagner Group’s retreat. On the same line were concerns that China’s economic recovery may lose momentum and can negatively affect the Antipodeans and commodities.

While the deal to end the alleged coup was struck between Russian authorities and the mercenary group, the boss of Russia's Wagner group, two days after leading an aborted mutiny, said he never intended to overthrow the government, per Reuters. On the same line, Russian President Vladimir Putin thanked Wagner fighters who stood down. The same eased the market’s fears a bit but the global leaders, including those from the UK and the US, have flagged concerns about Vladimir Putin’s hold onto Moscow, which in turn teases the Russian leader to take action and prove the world wrong, suggesting more geopolitical drama ahead.

On the other hand, Chinese analysts came out with the push for more and sooner stimulus to defend the economy from slipping back into the recession. The same joined Beijing’s previous readiness for more fiscal measures to propel the spending, which in turn puts a floor under the Gold price. However, the global rating giant S&P cut China’s Gross Domestic Product (GDP) growth forecasts for 2023 to 5.2% from 5.5% previous estimations. On the same line are concerns suggesting major investors’ pause in China investment.

It should be noted that US Dallas Fed Manufacturing Business Index for June improved to -23.2 versus -26.5 expected and -29.1 previous readings. During the last week, the US Core inflation for May allowed Fed Chairman Jerome Powell to remain hawkish but the Purchasing Managers’ Indexes for June weren’t impressive enough. Even so, Federal Reserve Bank of San Francisco President Mary Daly signaled on Friday that two more interest rate increases this year would be a "very reasonable projection." Hence, the hawkish Fed concerns gain support from the US data and weigh on the AUD/USD price.

Elsewhere, Bank for International Settlements (BIS) General Manager Agustin Carstens warned in the BIS annual report published Sunday, “The world economy was now at a crucial point as countries struggle to rein in inflation.” The same propelled the economic fears and prod the AUD/USD price due to the pair’s risk-barometer status.

Looking ahead, AUD/USD traders will pay attention to the risk catalysts amid a lack of major data/events ahead of the US Durable Goods Orders for May, expected -1.0% versus 1.1% prior, as well as the second-tier activity and housing data. Should the US statistics keep coming in upbeat, the Aussie pair can resume the downtrend. Also important to watch will be the US Conference Board’s (CB) Consumer Confidence data for June, expected 103.90 versus 102.30 prior.

Technical analysis

Monday’s bullish Doji candlestick on the daily chart needs validation from the 200-SMA level of 0.6695, as well as the 0.6700 round figure, to convince the AUD/USD buyers.