- AUD/USD trims early Asian losses, picks up bids after refreshing intraday low.
- RBA Monetary Policy Statement repeats “no rate hike until 2024”, China Caixin Services PMI marks positive surprise.
- Risk-on mood fails to keep US dollar pressured as early signals for NFP favor bulls.
- Australia shows readiness to talk with China despite the end of “Strategic Economic Dialogue,” NSW Premier rejects lockdown calls.
After an initial drop to refresh intraday low with 0.7776, AUD/USD picks up bids to 0.7789 during the early Friday’s trading. The Aussie pair’s latest zigzag moves could be traced to the Reserve Bank of Australia’s (RBA) Monetary Policy Statement as well as the risk-on mood.
As per the latest quarterly RBA Monetary Policy Statement, policymakers don’t support any rate hikes until 2024 while expecting upbeat GDP and easing Unemployment Rate going forward.
Read: Breaking: RBA SoMP's, level of a$ broadly consistent with fundamentals
It should be noted that China's Caixin Services PMI for April also backs the AUD/USD run-up towards the 0.7800 threshold. The private activity gauge from Beijing grew beyond 54.6 prior to 56.3 in April.
Read: China's Caixin Services PMI rises to 56.3 in April, AUD/USD near 0.7800
In addition to the upbeat report from the Aussie central bank, the market’s recent optimism over the coronavirus (COVID-19) vaccine and receding fears of reflation also back the AUD/USD bulls. Further, Australian Trade Minister Dan Tehan’s readiness to talk to China despite Beijing’s rejection of the diplomatic trade dialogue and “no lockdown” comments from the New South Wales (NSW) Premier Gladys Berejiklian also backs the pair buyers. It’s worth mentioning that the US and European Union’s (EU) readiness to support a waiver of patent protection to the covid vaccines add strength to the risk-on mood.
However, the pre-NFP cautious mood joins escalating coronavirus (COVID-19) woes in Asia to weigh on the quote.
Amid these plays, S&P 500 Futures rise 0.16% on a day while the US 10-year Treasury yields gain 1.1 basis points (bps) to 1.572% by the press time.
Moving on, AUD/USD traders will keep their eyes on the April month’s trade figures from China ahead of the key US employment report.
Read: US April Nonfarm Payrolls Preview: Leading indicators point to another strong NFP
Technical analysis
Although multiple tops guard short-term AUD/USD advances around 0.7820, a confluence of 50-day and 100-day SMA around 0.7705-10 becomes a tough nut to break for the bears.