- AUD/USD keeps Friday’s bearish impulse around key support levels.
- Fresh challenges to US President Joe Biden’s $1.9 trillion stimulus, covid strain worries weigh on risks.
- Mixed data renewed doubts over monetary policy actions.
- The key risk catalysts will be in spotlight amid a light calendar.
AUD/USD begins the week’s trading on a back foot as sellers attack 0.7700, currently down at 0.7711, amid the initial hour of Monday’s Asian trading session. The aussie pair snapped a three-day winning streak on Friday as a few Democrats raised doubts over US President Biden’s fiscal stimulus. Also challenging the mood was the speedy infection of the coronavirus (COVID-19) strain and mixed data.
Biden-backed optimism fades…
Despite the notable welcome of US President Biden’s presidency, the mood started souring off-late. The reason could be traced from some of the Democratic members who aren’t in a mood to back Mr. President’s second stimulus that he teased during the first week of his reign.
Also, the virus woes are getting stronger and push the UK, Europe and the US towards strong measures to tame the infection. Among them, Britain is likely to seal the national boundaries while the US is planning to recall an entry ban on travelers from the UK, Ireland and Brazil. Further, virus conditions in France and Germany are also worsening with record death tolls, which in turn suggests extensions of the national lockdown.
Elsewhere, a preliminary reading of the Aussie Retail Sales disappointed in December while activity data came in mixed. Over the counter, the US PMIs also conveyed hidden fears of GDP contraction despite trying to unveil market like for Biden.
Against this backdrop, Wall Street benchmarks turned red on Friday and the US 10-year Treasury yields also eased.
Looking forward, the Australian economic calendar carries no major data in the first two days of the week, Tuesday is a bank holiday in Australia. That said, global market players will keep their eyes on the virus and stimulus updates for fresh impulse. As a result, AUD/USD sellers stay hopeful for entries.
Failures to cross 13-day-old falling trend line, at 0.7790 now, tease AUD/USD bears’ entry. However, a five-week-old rising support line, at 0.7705, restricts the quote’s immediate downside ahead of 0.7645/40 support zone comprising January 04 low and December 17 high.