AUD/USD flirts with 0.7800 amid sluggish trading, downbeat US dollar
- AUD/USD wavers inside a 35-pip trading range after refreshing weekly top.
- Risk sentiment dwindles despite RBA minutes, vaccine hopes and Yellen’s push to support Biden administration measures.
- US dollar drops to fresh low since late February, Wall Street remains on the back foot.
- Australia Wage Price Index, FOMC minutes will be the key.
AUD/USD picks up bids around 0.7800, keeping the latest range between 0.7780 and 0.7815, amid the early Wednesday morning in Asia. The Aussie pair jumped to 0.7815 amid Tuesday’s Asian session as RBA minutes and upbeat sentiment favored bulls. However, a lack of clear direction and cautious sentiment ahead of today’s US Federal Open Market Committee (FOMC) meeting minutes seem to have pulled the quote back towards 0.7780, before the latest bounce that portrays sideways moves.
Mixed messages trouble bulls…
Vaccine optimism joined hopes of further stimulus and downbeat US data to favor the risk-on mood but Geopolitical and virus-related fears, coupled with the pre-event caution chained the bulls. Also on the positive side was the RBA minutes while the Aussie-China tussles occupied the alternative end.
US President Joe Biden’s readiness to shares authorized covid jabs with the countries in need and China’s push for the coronavirus (COVID-19) vaccine patent waiver join Moderna and Pfizer updates suggesting a cure to the Indian variant of the deadly virus to portray vaccine optimism.
Elsewhere, RBA minutes turned down odds to use yield curve control even if needed while reiterating no rate hike before 2024. On the other hand, US Housing Starts and Building Permits for April came in weaker.
Furthermore, the Middle East tension continues and so do Canberra-Beijing tussles. On the same line were pessimism concerning the virus spread in Asia and Indian variant of the covid in the West.
Amid these plays, Wall Street benchmarks post another negative day even as US Treasury bond yields stay mostly unchanged around 1.64%. Though, the US dollar index (DXY) prints a fourth consecutive daily drop towards February 25 low while gold manages to shine above $1,860.
Moving on, AUD/USD traders will seek clarity of market sentiment as well as a strong print of the Aussie Wage Price Index for Q1, expected 0.5% versus 0.6% prior, to keep buyers hopeful ahead of the FOMC minutes.
Technical analysis
AUD/USD remains above a five-week-old support line and 50-day SMA, respectively around 0.7730 and 0.7715, in a bullish sign. However, multiple tops marked since January becomes a tough nut to crack around 0.7820.