- AUD/USD trims intraday gains during the two-day run-up.
- Market sentiment dwindles amid mixed comments from Fed, inactive Asian session.
- US Treasury yields stay pressured, stock futures track Wall Street’s gains.
- Risk catalysts remain as the key, inflation headlines are important.
AUD/USD portrays another pullback from 0.7762, around 0.7755 by the press time, ahead of Tuesday’s European session. The Aussie pair has been struggling since early Asia as the US dollar troubles the traders amid downbeat Treasury yields.
Following the initial optimism towards the less-constrained Fedspeak over US inflation, as well as the soft Chicago Fed National Activity Index, the US dollar index (DXY) seems struggling of late.
The reason could be traced to the fresh comments from Kansas City Federal Reserve President Esther George suggesting fears of an inflation surge. Also helping the US dollar buyers could be the consolidation moves amid a light calendar and thin feeds during the Asian session.
It’s worth mentioning that the People’s Bank of China’s (PBOC) intervention also couldn’t entertain AUD/USD traders as markets turn cautious ahead of the key US inflation gauge, up for publishing on Friday. Even so, S&P 500 Futures cheer downbeat US 10-year Treasury yields to replicate the Wall Street benchmarks.
Moving on, intraday traders will keep their eyes on the Fedspeak for any fresh clues relating to the inflation and/or tapering ahead of the US CB Consumer Confidence data.
Read: US Conference Board Consumer Confidence May Preview: Inflation saps consumer sentiment
Technical analysis
A clear breakout of 200-SMA and bullish MACD back the AUD/USD buyers to attack a downward sloping trend line from May 11, around 0.7770. Meanwhile, a downside break of 200-SMA near 0.7745 may witness multiple supports around the 0.7700 threshold before dropping back towards the short-term falling support line near 0.7675.