“¢ Meets with some fresh supply in wake of yet another disappointing Aussie data.
“¢ A modest uptick in the US bond yields revive USD demand and add to the selling bias.
“¢ Traders now eye US economic releases for some impetus ahead of the Chinese data dump.
The AUD/USD pair maintained it’s heavily offered tone on Wednesday and is currently placed at the lower end of its daily trading range, around mid-0.7000s.
After yesterday’s failure just ahead of the 0.7100 handle, the pair met with some fresh selling pressure during the Asian session on Wednesday following the disappointing release of Westpac consumer sentiment index for March. In fact, the index recorded its biggest slide since the end of 2017 and fell 4.8% during the reported month, down from a 4.3% rise recorded in the previous month.
A sharp drop in confidence clearly pointed to a slowdown in consumer spending in the near-term, which against the backdrop of Tuesday’s dismal NAB business conditions/confidence index further strengthened the case for an RBA rate cut and was seen as one of the key factors weighing on the domestic currency.
Meanwhile, investors looked past the previous session’s softer US consumer inflation figures and a modest rebound in the US Treasury bond yields helped revive the US Dollar demand. This coupled with a slight deterioration in investors’ appetite for riskier assets, as depicted by a weaker tone around equity market further collaborated towards driving flows away from perceived riskier currencies – like the Aussie.
Moving ahead, today’s US economic docket, highlighting the release of durable goods orders data and the latest PPI figures, will now be looked upon for some short-term trading impetus ahead of Chinese data dump during the early Asian session on Thursday.
Technical levels to watch
Any subsequent slide is likely to find some support near the 0.7030 region, below which the pair is likely to head back towards challenging the key 0.70 psychological mark. On the flip side, the 0.7080 now seems to act as an immediate resistance, which if cleared might assist the pair to make a fresh attempt towards conquering the 0.7100 round figure mark.
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