- AUD/USD snaps two-week downtrend, holds lower grounds on a day.
- Optimism surrounding Evergrande, Fed and US stimulus backed the biggest daily jump in a month.
- IMF cuts 2021 Aussie GDP forecast, China battles power problems as market awaits Evergrande coupon payment.
- Light calendar may favor consolidation, news from Beijing, Fedspeak eyed.
AUD/USD flirts with 0.7300, teasing intraday low, amid early Friday.
The risk barometer jumped the most since late August the previous day to refresh the monthly peak, pushing the quote towards the first weekly gain in three. However, the latest moves have been sluggish of late.
While tracing the pullback, the International Monetary Fund’s (IMF) downgrade of Australia's GDP forecast for 2021 gains major attention. On the same line was the market’s anxiety as traders await Evergrande’s scheduled bond coupon payment. Furthermore, comments from China’s National Development and Reform Commission (NDRC) suggesting issues of rising raw material prices and power limits tame the AUD/USD bulls.
On the contrary were comments from Australia Treasury Josh Frydenberg who said, “significant growth expected post-Delta.”
That said, the Fed’s rate hike and tapering signals, coupled with Chinese help to Evergrande and progress over the US $3.5 trillion stimulus talks favored the market sentiment, as well as AUD/USD prices on Thursday.
Against this backdrop, the US 10-year Treasury yields refresh 11-week top to 1.43%, following the heaviest daily jump since February. Further, the S&P 500 Futures rise 0.15% intraday during the three-day rebound at the latest.
Moving on, a slew of Federal Reserve (Fed) speakers, including Chairman Jerome Powell, are slated for speeches during Friday, likely making the dull active going forward. Also important is the US New Home Sales for August, expected 0.7M versus 0.708M prior, as well as headlines relating to China’s embattled real-estate firm and US stimulus.
Technical analysis
AUD/USD bulls need validation from 50-DMA, near 0.7330, to extend the 13-day-old trend line breakout, around 0.7250 by the press time.