AUD/USD: Run-up to 0.8000 slows down near 36-month top amid mixed clues

  • AUD/USD struggles to keep recovery moves above 0.7879 above 0.7900.
  • Powel matched expectations of reprinting cautious optimism, tried to placate reflation fears.
  • US data was up, Aussie preliminary trade figures disappointed but nothing was major, yields remain hesitantly elevated.
  • Australia’s Q4 Wage Price Index, risk catalysts in the spotlight.

AUD/USD eases towards 0.7900, currently around 0.7910, during the early Asian morning on Wednesday. The pair refreshed the highest level since February 2018 before declining to 0.7879 before a few hours. The following corrective move, however, couldn’t last longer beyond 0.7920.

Although global markets took a sigh of relief after Fed Chairman Jerome Powell’s half-year testimony refrained from any negative surprises, challenges on the road to recovery as well as downbeat fundamentals at home probe the AUD/USD bulls off-late. Also on the negative side is the jump in the global treasury yields and US stimulus gridlock.

Nothing clear for the bulls…

While trying to defend the Fed’s easy money policy, Powell didn’t sacrifice on flashing the odds of the rising inflation. However, the US central banker did say that there is a long way from achieving its objectives and that policy will remain accommodative until substantial progress is made. That should have been enough to tame the reflation worries and propel the equities but it couldn’t. Following Powell’s testimony, the US dollar nursed some of its earlier losses around a seven-week low while Wall Street benchmarks closed mixed for Tuesday.

The reason could be traced from mixed US and Aussie data as well as no major progress on the American covid relief package. US CB Consumer Confidence and housing market figures came in better than forecast for January while Australia’s preliminary trade data for last month marked a heavy drop in exports. Elsewhere, the US policymakers keep jostling with the much-awaited stimulus despite flashing signs of putting it on the floor this week.

It’s worth mentioning that the vaccine optimism joins further unlock news to keep the market sentiment mildly positive despite growing doubts on the economic recovery, except for China.

While the bond bears are catching a breather off-late, equities and commodities couldn’t also post any notable improvement. Hence, traders should wait for clearer direction.

In doing so, Australia’s fourth-quarter Wage Price Index, expected to rise 0.3% versus 0.1% prior on QoQ, as well as further clues on the US COVID-19 relief package can help in Asia.

Technical analysis

The tops marked on April 2018 and January 2021, around 0.7820-15, become the key for AUD/USD sellers to watch, before trying to battle the bulls eyeing the 0.8000 threshold.

Additional important levels

Today last price 0.7909
Today Daily Change -4 pips
Today Daily Change % -0.05%
Today daily open 0.7913
Daily SMA20 0.7718
Daily SMA50 0.7694
Daily SMA100 0.7473
Daily SMA200 0.726
Previous Daily High 0.793
Previous Daily Low 0.7854
Previous Weekly High 0.7878
Previous Weekly Low 0.7724
Previous Monthly High 0.782
Previous Monthly Low 0.7592
Daily Fibonacci 38.2% 0.7901
Daily Fibonacci 61.8% 0.7883
Daily Pivot Point S1 0.7868
Daily Pivot Point S2 0.7824
Daily Pivot Point S3 0.7793
Daily Pivot Point R1 0.7944
Daily Pivot Point R2 0.7975
Daily Pivot Point R3 0.8019



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