Search ForexCrunch
  • AUD/USD stays well beyond two weeks’ low, flashed the previous day, to negate the weekly loss.
  • US dollar weakness joins chatters concerning TikTok and ECB to amplify the early Wednesday’s bounce.
  • Welcome prints of second-tier Aussie data, China’s inflation figures managed to counter news relating Brexit, pandemic and vaccine.
  • Australia’s Consumer Inflation Expectations for September will be an immediate catalyst.

AUD/USD seesaws inside the 0.7268-88 trading range, currently around 0.7280, at the start of Thursday’s Asian session. The risk-barometer marked a notable recovery of near 1.0% on Wednesday to defy the weekly loss. While the Aussie specific catalysts offered initial pull to the quote from a multi-day-old support line, broad US dollar correction added strength into the upside momentum afterward. Given the light calendar ahead, coupled with the pre-ECB cautiousness, traders may keep eyes on the risk headlines for fresh impulse.

US dollar snapped six-day winning streak ahead of ECB…

The US dollar index (DXY) retraced from one-month high the previous day to stop the bulls after they pull the quote off 28-month during the last few days. While chatters that the European Central Bank (ECB) policymakers are more optimistic added to the greenback’s correction, news that TikTok’s parent Bytedance is talking with the US to avoid the full sale of the company also trimmed the US currency’s safe-haven demand. Additionally, the US State Department’s announcement to keep the doors open for Chinese students, those who don’t support their national leading party, after over 1,000 visa rejection, also favor the market’s risk-on mood.

Positive sentiment could also be traced from the early Wednesday’s upbeat Consumer Confidence and Home Loans data from Australia as well as China’s upbeat prints of Producer Price Index (PPI).

It should, however, be noted that the US dollar’s rise couldn’t be traced from the American data as July month’s JOLTS job openings were 6618, compared with 6001 in June.

Against this backdrop, Wall Street managed to recover some of its latest losses whereas the US 10-year Treasury yields also gained around 1.4 basis points to attack 0.70%.

Looking forward, Australia’s September month Consumer Inflation Expectations, prior 3.3%, can offer immediate direction while risk catalysts can keep the driver’s seat during the Asian session. Moving on, the market players will be cautious ahead of the ECB meeting and the same will be decisive for the day and this week.

Technical analysis

10-day SMA near 0.7305 guards the pair’s further recovery moves towards 0.7340 and the 0.7400 round-figures. Alternatively, a 50-day SMA level of 0.7150 will add support to the quote’s downside past-0.7200 mark comprising an ascending trend line from August 03.