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  • AUD/USD portrays a corrective pullback near six-week low.
  • Broad US dollar strength, dovish comments from RBA’s Lowe supersede mixed data from Australia, upbeat market sentiment.
  • RBA’s Lowe will testify before the House of Representatives Standing Committee on Economics.
  • RBA Statement, Aussie Retail Sales and risk catalysts are extra factors to watch.

AUD/USD pierces 0.7600 as bears catch a breather around multi-day low during the early Asian session on Friday. The aussie pair dropped to 0.7587 despite an upbeat risk-tone as the US dollar index (DXY) rose to a nine-week top during the five-day uptrend. Although retail rush chatters regained momentum, hopes of US stimulus and vaccinations joined BOE’s Super Thursday and no major positives from Europe to favor the greenback.

Busy day for AUD traders…

Not only RBA Governor Philip Lowe’s Testimony in front of House of Representatives but the quarterly monetary policy statement and final reading of December’s Retail Sales also offers an active day for the Australian dollar traders. Also adding to the line are on-going risk catalysts like the coronavirus (COVID-19) and vaccine updates, US stimulus developments and any major news concerning the market frenzy that recently roiled investor confidence.

That said, global markets keep their faith in the US dollar in anticipation of a $1.9 trillion stimulus from American President Joe Biden. The speculations got strengthened after Democrats managed to push their proposal of fast-tracking the much-awaited aid package through the House. Additionally favoring the odds of relief were comments from US Treasury Janet Yellen and Fed policymakers who highlighted the dire need for the same.

Other than the stimulus, increasing vaccinations and receding covid numbers join the sluggish performance of European data and the Bank of England’s (BOE) indirect no to negative rates, despite the warning to stay ready for it, also added to the US dollar gains.

Furthermore, RBA Governor Lowe also repeated the Aussie central bank’s dovish outlook over inflation and showed concerns over the future policy moves despite trying to avoid the negative rates. It’s worth mentioning that Australia’s December Trade Balance rose but no major growth in Exports and downbeat Imports defied the importance of data at home.

Against this backdrop, Wall Street benchmarks mark over 1.0% gains each by the end of Thursday’s closing, with S&P 500 and Nasdaq 100 marking record high closing. Further, the US 10-year Treasury yields also remained strong near December 01 high.

Looking forward, AUD/USD sellers should eye for repetition of the previous day’s inflation worries in RBA Governor Lowe’s testimony, failing to do so can accelerate the latest corrective pullback. The quarterly economic forecasts from the RBA are also a vital source of information that is likely to portray a bit less bright future for Australia and weigh on the quote. Above all, today is the US NFP day and the pre-event trading lull can play its role.

Technical analysis

10-day SMA adds strength into the previous support-zone, now resistance area, near 0.7640-50. Meanwhile, 0.7520 and late December low near 0.7460 are on the AUD/USD sellers’ radar.