- AUD/USD remains range bound in a choppy range after two-day uptrend to weekly top.
- Australia’s Construction Work Done drops below 2.5% forecast to 0.8% in Q2.
- Market sentiment dwindles amid pre-Jackson Hole Symposium caution, mixed covid updates and a light calendar.
- US Durable Goods Orders, qualitative factors may entertain traders but nothing important than Powell’s speech.
AUD/USD seesaws inside the 15-pip range, down 0.08% near 0.7552 during early Wednesday. The Aussie pair cheered risk-on mood during the last two days to recover from the yearly low. However, the latest challenge to the risk appetite and downbeat Aussie data, coupled with inactive markets, seem to question the pair buyers of late.
Australia Construction Work Done dropped below 2.5% market consensus and 2.8% previous readouts to 0.8% during the latest readings for the second quarter (Q2). While being the key component to the GDP, the data offers an additional excuse to the Reserve Bank of Australia (RBA) while defending the easy money policy.
In addition to the data, coronavirus updates also challenge the AUD/USD bulls. While ABC News mentions the record high infections in Australia, mainly led by the New South Wales (NSW), China’s Hunan Province removed all traffic checkpoints and resumed normal public traffic after the city is declared low-risk from COVID-19 per the Global Times.
It’s worth noting that the US Health Official Dr. Anthony Fauci’s expectations to get the COVID-19 under control during early 2022, provided faster jabbing, battles multi-day high death tolls and rising infections in the developed nations.
Other than the covid updates and data, geopolitical chatters relating to Afghanistan and China, as well as cautious mood ahead of the key Jackson Hole Symposium even challenge the Aussie pair moves due to its risk barometer status.
Against this backdrop, the US stock futures struggle for a clear direction after an upbeat Wall Street close. Further, the US 10-year Treasury yields refresh one week top near 1.30% by the press time after rising the most in two weeks the previous day.
Moving on, AUD/USD traders will have to pay close attention to the risk catalysts for clear direction. Additionally, the US Durable Goods Orders for July, forecast -0.3% versus +0.9% prior, should also be watched for further firming up odds favoring the need for easy money policies, which in turn could recall the buyers if matching downbeat forecasts.
Read: Durable Goods Orders Preview: The trigger for a greenback comeback?
Technical analysis
Unless dropping back below October 2020 tops surrounding 0.7245-40, AUD/USD remains capable of meeting July’s low surrounding 0.7290 and a downward sloping trend line from June 25, near 0.7335. Meanwhile, a downside break of 0.7240 will recall the bears to aim for October 26, 2020, swing high close to 0.7180 before dropping towards the yearly bottom of 0.7105.
