- AUD/USD retreats after reversing early Monday’s losses by the day’s end.
- $20 billion block-sale, month-end positioning weigh on equities, Treasury yields stay firm.
- Vaccine optimism battles fears of tax hike in infrastructure spending plan, Sino-American tussle escalates.
- Risk news, dollar moves become the key amid a dry calendar in Asia.
AUD/USD trades around 0.7630, mostly unchanged after reversing early Monday’s losses, as Asian traders gear up for Tuesday’s performance. The risk barometer initially weighed concerns over the coronavirus (COVID-19) outbreak in European and the US-China tussles before recovering on hopes of faster immunization and stronger vaccines. Also favoring the mood could be US President Joe Biden’s $3.0 billion infrastructure spending plan. However, month-end positioning and a light calendar restrict the aussie pair’s moves off-late.
Traders await fresh clues to welcome April”¦
As increasing covid fears from Europe battles upbeat news from global vaccine producers, recently from Pfizer and Moderna, US President Biden’s push for faster jabbing gains accolades from the optimists. Also on the positive side was the news of Ever Given’s refloating after almost of week of blocking international trade from the Suez Canal.
Further, the US infrastructure spending bill recently lost its allure on chatters of including tax hikes whereas American refusal to ease Chinese tariffs got Beijing’s criticism to the Western friends. At home, a three-day lockdown in Brisbane should have weighed the AUD/USD prices but failed as it was expected from last week.
On the data front, the strong US Dallas Fed Manufacturing Business Index for March backed hopes of upbeat employment data, up for publishing on Friday, which in turn helped the US dollar to remain firmer.
It’s worth mentioning that a hedge fund’s force sale triggered fears of $20 billion losses, initially conveyed by Nomura and Credit Suisse, while the month-end positions also played their role to tame Wall Street.
As compared to the sluggish move by US equities, bond yields remain strong and so do the US dollar index (DXY).
Moving on, a lack of major data/events can keep AUD/USD traders searching for fresh clues. In doing so, COVID-19, China and stimulus are likely to be the key.
Technical analysis
A daily closing beyond 100-day SMA, around 0.7620 by the press time, enables AUD/USD bulls to eye the 0.7700 threshold during further recovery from the key 0.7557-62 support-zone comprising lows marked since December 28, 2020.
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