AUD/USD: Seesaws around mid-0.7500s with eyes on US stimulus headlines for fresh run-up

• AUD/USD consolidates the previous day’s gains around the highest since June 2018, marked on Monday.
• Trade sentiment remains positive on vaccine, US aid package hopes.
• Western tussle with China, virus woes challenge the bulls.
• Australia’s Commonwealth Bank PMIs rose in December, Westpac Leading Index, HIA New Home Sales awaited.

AUD/USD wavers around 0.7550/60 during the initial Asian session on Wednesday. The aussie pair benefited from the broad risk-on mood the previous day. However, fears of an escalation in the US-China and the Canberra-Beijing tussles probed the bulls near the multi-day high refreshes earlier in the week. Traders currently await the US stimulus headlines while paying less heed to the activity numbers flashed by the Commonwealth Bank of Australia (CBA).

Stimulus matters more than the PMIs…

The Preliminary readings of CBA Manufacturing, Services and Composite PMIs for December came out better than their previous readouts. While Manufacturing crossed the 55.8 level with 56.0, Services PMI grew past-55.4 to 57.4. With this, the Composite PMI crossed 54.9 to 57.0 for the stated period.

Despite upbeat data at home, AUD/USD remains less positive, recently easing, as the market mood turns cautious while waiting for more signals on the US stimulus and the Fed. Also challenging the sentiment could be the Western tension with China.

US Treasury Secretary Steve Mnuchin, House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnel are discussing the much-awaiting aid package and the latest updates have been positive. It should be noted that the on-going talks among the policymakers are up for closing in the next 1.5 hours.

Read: Progress was made on stimulus talks

Elsewhere, MSCI follows the likes of the S&P and the Dow Jones while delisting some of the Chinese firms due to the US restrictions. Further, chatters concerning the Australian government’s readiness to approach the World Trade Organization (WTO) over China’s recent trade punitive measures also weigh on the mood.

Additionally, worsening virus conditions in the US, the UK and Europe are extra causes of worries that battle vaccine hope.

Amid these plays, Wall Street benchmarks gained over 1.0% each by the end of Tuesday’s trading whereas the US 10-year Treasury yield also rose to 0.90%.

Moving on, the stimulus headline will the key for the market sentiment and the AUD/USD as well. Following that, the traders may follow the pre-Fed trading lull but the risk headlines will be the key.

Technical analysis

An ascending trend line from November 02 joins 10-day SMA around 0.7480/85 to restricts the AUD/USD downside for the short-term. Meanwhile, June 2018 peak surrounding 0.7680 lures the pair buyers.