- AUD/USD defies pullback from the multi-month high marked the previous day.
- Aussie Preliminary Trade Figures for January dropped, weekly consumer sentiment eased for third week, China’s monetary policy normalization on cards..
- Japan eyes to remove virus-led emergency in Tokyo and surrounding prefectures, US stimulus talks progress.
- Powell will be eyed closely amid mixed economics off-late.
AUD/USD stays in the choppy range between 0.7910 and 0.7922 since the start of Tuesday’s Asian session. In doing so, the quote pays little heed to the Australian preliminary trade numbers for January. The pair jumped to the highest since February 2018 the previous day but a lack of major directives and cautious sentiment ahead of the key event keep the quote on the sidelines.
Australia’s January month trade figures flashed downbeat data with exports dropping 9% and imports down 10%. Among the major countries, trades with the US and Japan are down the most.
Read: Australia preliminary trade figures for January, exports drop 9% MoM, AUD steady
Earlier in the day a third consecutive week of downbeat Consumer Confidence data from ANZ-Roy Morgan, from 109.9 to 109.2 recently, couldn’t move the AUD/USD prices.
It should be noted that the chatters surrounding Japan’s expected removal of virus-led emergencies from Tokyo and nearby prefectures should have helped the quote, amid risk-on mood, but failed off-late.
Also on the positive side were hints of China’s economic recovery and gradual scaling down monetary easing, as well as the US policymakers’ push for President Joe Biden’s $1.9 trillion covid relief stimulus.
However, strong bond yields keep the reflation fears on the card and tame the bulls ahead of Fed Chairman Jerome Powell’s bi-annual testimony. Although Powell is most likely to reiterate his cautious optimism, any surprises won’t be taken lightly.
Read: The Week Ahead: Inflation and the Fed
Technical analysis
Unless breaking below 0.7820-15 area comprising highs marked on April 2018 and January 2020, AUD/USD sellers are less likely to step-in. Meanwhile, February 2018 peak surrounding 0.7975-80 can offer an intermediate halt on the way to 0.8000 psychological magnet.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold aiming to re-conquer the $2,400 level
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.