- AUD/USD drops back towards yearly low, rejects the previous day’s rebound.
- Risk-on mood fades as Australia registers most daily virus cases since September 2020.
- US Pres. Biden stays optimistic even as Senators pushed back infrastructure spending debate to Monday.
- ECB, second-tier US data in the spotlight, qualitative factors are the key.
AUD/USD remains pressured around intraday low, down 0.18% on a day near 0.7345, amid Thursday’s Asian session. In doing so, the Aussie pair reverses Wednesday’s recovery moves from the yearly low as the coronavirus (COVID-19) infections jump in Australia.
Australia’s New South Wales (NSW) record the highest daily covid infections, 122, since the current outbreak began in June. The same propels the national count to 152 by the press time, the highest in 10 months. This pushes NSW Premier Gladys Berejiklian to say, per the ABC News, “Many of those found to have been infectious in the community were buying groceries, going to the pharmacist and undertaking critical work.”
On the other hand, the UK reported a slightly higher daily count, 44,104 versus 42,302 the previous Wednesday, but a 50% weekly jump in the death toll to 73 keeps highlighting the Delta covid variant fears.
It’s worth noting though that US President Joe Biden’s optimism over infrastructure spending passage, despite Senators’ rejection to the opening debate, joins upbeat Wall Street performance to challenge the bears. The US equities rose for the second consecutive day on Wednesday amid strong earnings.
Talking about data, National Australia Bank’s (NAB) Business Confidence for the second quarter (Q2) eased below 21 market consensus to 17, versus 19 revised prior. Further, the preliminey trade figures for June showed a record surplus of Australia dollar (AUD) 13.3 billion with the 8% jump in Exports of goods and Imports of godds each.
Amid these plays, the US Dollar Index (DXY) regains upside momentum after stepping back from the three-month high on Wednesday, which in turn keeps AUD/USD sellers hopeful.
Considering the lack of major data/events ahead of the US session, AUD/USD traders may keep taking clues from the covid conditions at home and please the bears. However, pre-ECB trading lull and mixed concerns over stimulus may challenge the pair’s further downside.
Technical analysis
Until staying below 0.7410-15 horizontal area comprising August–September 2020 tops and early July lows, AUD/USD bears stay directed towards October high of 0.7244.
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