- AUD/USD remains pressured during four-day downtrend.
- Australia witnesses more local lockdowns, bond moves add to USD strength.
- RBA, PBOC couldn’t placate bears, risk catalysts are the key.
AUD/USD drops to a fresh low since November 2020, before recently bouncing off, down 0.30% around 0.7317, ahead of Tuesday’s European session. The risk barometer earlier paused near the yearly low as sellers awaited more clues following dull RBA minutes and the PBOC inaction. However, the US dollar strength and the Delta covid variant fears recently dragged the quote.
The US Dollar Index (DXY) picks up bids to 92.88, up 0.06% during the four-day uptrend, near a three-month high by the press time. In addition to the virus woes, pause in the US Treasury yields’ consolidation near February lows seems to favor the DXY bulls of late.
South Australia announces fresh seven-day lockdown whereas Victoria extends activity restrictions by a week. On the positive side, Sydney marks the fourth day of lower covid infections as well as Aussie Health Minister Greg Hunts’ tweet signaling one million Pfizer vaccine doses a week will land in Australia.
It should be noted that the updates over the US President Joe Biden’s infrastructure bill seem to have probed the US bond buyers. That said, the US 10-year Treasury yields one basis point (bp) to 1.19% by the press time. US Senate Majority Leader Chuck Schumer announced a procedural vote to be held on US President Joe Biden’s infrastructure bill on Wednesday.
Elsewhere, the US alleged China over the recent cyber attack while also raising travel alert levels for the UK on a different page.
Amid all these plays, stock futures print mild gains but Asia-Pacific shares remain offered and keep AUD/USD sellers hopeful. Though, US housing numbers and further upside over the risk factors discussed above become crucial for fresh direction.
Technical analysis
AUD/USD bears need daily closing below 0.7340, comprising tops marked during September and November 2020, to attack October highs near 0.7245. Until then, a corrective bounce towards the 0.7400 threshold, followed by July 09 lows surrounding 0.7410 can’t be ruled out.
