AUD/USD struggles for a firm direction below 0.6900 amid mixed clues
- AUD/USD eases from 0.6892 still carrying the late-US session recovery from 0.6833.
- Fed-led optimism initially favored the pair on Tuesday, USD recovery trimmed gains afterward.
- News of Beijing’s lockdown, RBA minutes failed to get major audience.
- Aussie Westpac Leading Index, risk catalysts worth watching for immediate direction.
AUD/USD recedes to 0.6880 at the start of Wednesday’s Asian session. The Aussie witnessed a volatile day on Tuesday as the early-day rise to 0.6977 had to witness a pullback towards 0.6833, before bouncing back to 0.6904, during the late US session. While the Federal Reserve’s bond-buying initially offered upside push to the quote, a notable rise in the US Retail Sales dragged the quote a bit then after.
It’s all about catalysts from the US…
Be it the Fed’s action or the US Retail Sales, not to forget Chairman Jerome Powell’s semi-annual testimony, everything outpaced the coronavirus (COVID-19) wave 2.0 in Beijing and the RBA minutes.
The US central bank’s effort to help corporate and non-profit organizations, via easy lending, pleased the bulls during the previous day’s Asian session. However, the record percentage rise in the Retail Sales, 17.7% MoM in May, helped the US dollar to recover some of the latest losses. Further, Fed Chair Powell reiterated his cautious statements, due to the pandemic, but showed readiness to act while giving less footage to the recent corporate bond purchase.
Amid all these catalysts, the return of the stricter lockdown in Beijing and RBA’s readiness to continue yield control measures, with no hurry to alter the benchmark rates, failed to negatively affect the market’s risk-tone sentiment.
The global markets remained mostly upbeat and helped Wall Street benchmarks to flash another positive day. Additionally, the US 10-year Treasury yields gained four basis points to 0.74% while portraying the broad optimism.
Looking forward, the Asian economic calendar carries fewer data/events to watch except for Australia’s Westpac Leading Index for May, prior -1.5%. As a result, qualitative catalysts may keep dominating the markets. In doing so, US Secretary of State’s visit to the Chinese diplomats in Hawaii as well as virus updates from Beijing may gain major attention ahead of the US session.
Technical analysis
The pair’s another failure to break the mid-January top surrounding 0.6965 gets strongly supported by 0.6840/35 horizontal area. However, the buyers remain optimistic unless witnessing a daily closing below an ascending trend line from April 03, at 0.6695 now.