- AUD/USD remains lackluster after stepping back from two-week top.
- Record covid infections and fears of further rise in hospitalizations probe buyers.
- Mixed equities join gold’s pullback and cautious optimism to add trading filters.
- Aussie Building Permits, second-tier US data decorate calendar but risk catalysts are the key to watch for fresh impulse.
AUD/USD stays subdued near 0.7300, recently easing to 0.7295, during Tuesday’s initial Asian session. The Aussie pair jumped to the highest levels since August 17 before marking a 0.21% daily loss the previous day amid mixed catalysts.
Among the key factors that weighed on the AUD/USD prices is the coronavirus conditions in the Oz nation. In addition to the consecutive increase in covid numbers to the all-time high, recently to 1,380, fears of more hospitalizations before peaking in October also weigh on the quote.
Also negative for the pair were headlines from Afghanistan and hurricane Ida, not to forget the US-China tussles. It’s worth noting that the cautious sentiment ahead of Friday’s US jobs report added filters to the pair’s trading moves.
Alternatively, a sigh of relief from the Jackson Hole Symposium speech of Fed Chair Jerome Powell and upbeat Aussie Company Gross Operating Profits for Q2 favored the AUD/USD pair buyers during a sluggish session.
It’s worth noting that the US Dollar Index (DXY) rebound questioned gold buyers and AUD/USD but record top of S&P 500 and Nasdaq keeps the bulls hopeful. Also, the downbeat US 10-year Treasury yields added to the pair’s woes due to its risk catalyst status.
Market players are more interested in the US Nonfarm Payrolls (NFP) than any other events during this week, mainly due to mixed comments from Fed’s Powell. Though, today’s activity numbers from the key customer China and second-tier data at home, as well as from the US, may entertain the AUD/USD traders. Above all, qualitative factors have an upper hand over the data and may fuel volatility.
China’s headlines NBS Manufacturing PMI is expected to ease from 50.4 to 50.2 whereas the Non-Manufacturing PMI could decline from 53.3 to 52.8. While downbeat forecasts signal further hardships for AUD/USD buyers, recovery in Aussie Building Permits for July, from -6.7% to -5.0% MoM, can challenge the bears.
Technical analysis
Although rebound from 10-DMA and bullish MACD signals favor AUD/USD bulls, a convergence of 20-DMA, as well as a downward sloping trend line from June 25, around 0.7295–7300 challenge the pair’s immediate upside.