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  • AUD/USD refreshes intraday low while stretching pullback from two-month high.
  • US dollar strength pushed back the bulls near multi-day high.
  • Risks stay mildly positive after the heavy optimism as vaccine hopes confront trade war jitters, Fed signals.
  • October’s Aussie NAB data, China inflation numbers to decorate the calendar.

While keeping corrective pullback from the multi-day high, AUD/USD drops to 0.7266, down 0.14% intraday, amid the initial Asian trading on Tuesday. The pair earlier surged to the highest since September 16 the previous day before stepping back from 0.7340 amid a broad US dollar recovery. Cautious sentiment ahead of data from National Australia Bank (NAB) and the National Bureau of Statistics of China seems to favor the bears off-late.

Bulls catch a breather…

“Moderna’s vaccine for the coronavirus (COVID-19) similar to Pfizer’s, expects results soon,” said US Health official Anthony Fauci during the CNN interview. The comments add to the market’s vaccine hopes after Pfizer-BioNTech conveyed, on Monday, 90% effectiveness in preventing the covid infections. However, the actual delivery of the cure will take some more time and hence the pandemic has a few additional months to challenge the global economy.

The Federal Reserve, in its latest biannual Financial Stability Report, also conveyed the near-term risk associated with the course of COVID-19 and its effects on the US and global economies.

Elsewhere, the US marked disappointment from the European decision to levy fresh tariffs on the $4 billion worth goods in the Airbus-Boeing lawsuit. Negative news also pops-up for the UK government as the British House of Lords rejected the Tory government’s proposal to override the Brexit treaty. Furthermore, US sanctions on four Chinese officials over the Hong Kong crackdown, as per Reuters, as well as Donald Trump’s efforts to block Pennsylvania from certifying the results challenge the risk-on mood.

Against this backdrop, S&P 500 Futures print 0.30% gains while Australia’s ASX 200 refreshes eight-month high by press time.

Looking forward, NAB’s October month Business Confidence and Business Conditions, prior -4 and 0 respectively, can offer immediate direction to the AUD/USD traders ahead of China’s inflation data for the previous month. While Consumer Price Index (CPI) from the dragon nation is expected ease from 1.7% to 0.8% YoY, the Producer Price Index (PPI) may ease from -2.1% prior to -2.0% on the yearly basis.

Alike scheduled data, risk catalysts also flash mixed signals and hence challenge the AUD/USD traders near the multi-day high.

Technical analysis

Unless crossing the mid-September high near 0.7350, AUD/USD signals further consolidation of the recent gains towards testing the early-October peak around 0.7245.