AUD/USD seesaws around 0.7750, focus on Aussie Retail Sales, Trade Balance

AUD/USD remains subdued inside a familiar area around 0.7750, following a volatile day comprising a drop from 0.7773 and a bounce off 0.7714, during early Asian morning on Thursday. In doing so, the Aussie data justifies the typical pre-data caution and a lack of major catalysts.

Lack of clarity leads to sluggish markets…

Despite marking nearly 60-pips intraday move, not to forget snapping three-week downtrend, AUD/USD couldn’t overcome the known region surrounding 0.7750 as a light calendar elsewhere joined mixed signals from qualitative catalysts.

In doing so, the Aussie traders ignored upbeat Q1 GDP, 1.8% QoQ versus 1.5% forecast, as well as mixed comments from RBA policymakers, namely Deputy Governor Guy Debelle and Head of Economic Analysis Brad Jones.

On the other hand, the Fed policymakers and Beige Book added to the market’s confusion as Philadelphia Fed Bank President Patrick Harker ruled out fears from inflation even as Beige Book portrayed the jump in price pressures.

It’s worth noting that optimism towards the US-China phase-one trade deal and hopes of further stimulus from the US and a group led by the International Monetary Fund (IMF) and the World Health Organization (WHO) also failed to offer tailwind to AUD/USD.

Amid these catalysts, Wall Street closed with mild gains whereas the US 10-year Treasury yields dropped 2.6 basis points to 1.58% by the end of Wednesday’s North American session, justifying the sluggish moves of AUD/USD.

Looking forward, Australia’s April month Trade Balance, expected 7900M versus 5574M prior, will join the final reading of the said month’s Retail Sales, likely confirming the 1.1% flash estimations, will entertain AUD/USD traders. Following that, the US ADP Employment Change, an early signal for Friday’s NFP, will join US ISM Services PMI and be closely watched for near-term direction. Although market consensus favor the recovery of AUD/USD prices, risk appetite may probe the momentum traders ahead of the key data on Friday.

Technical analysis

AUD/USD funnels down the key trading area between a three-week-old falling trend line and 50-day SMA, respectively around 0.7755 and 0.7720, with a receding bearish bias of the MACD signals suggesting an upside break. The same could propel the quote towards the 0.7800 threshold and the 0.7820 key hurdle, comprising multiple tops marked since January. Meanwhile, a surprise downside break of 0.7720 isn’t a free pass to the sellers as early April high and May’s lows carve out 0.7675 as the next important support.