AUD/USD stays above 0.7750 as risk-off mood battles US dollar weakness, upbeat NAB data

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  • AUD/USD picks up bids to print mild intraday gains, up for the second consecutive day.
  • National Australia Bank’s Business Confidence grew past forecast and prior readings during Q1 2021.
  • Risk catalysts remain depressed, S&P 500 Futures and US 10-year Treasury yield both print mild intraday losses.
  • ECB updates, market’s mood will be the key to follow.

AUD/USD offers slightly positive reaction, up 0.10% intraday around 0.7760, to the Aussie data during early Thursday. The reason could be traced from sluggish market sentiment as well as cautious mood ahead of the ECB.

National Australia Bank’s (NAB) Business Confidence not only crossed market consensus of 7 but also grew beyond 14 previous readouts to 17 during the first quarter (Q1) of 2021.

Market sentiment remains sober as the coronavirus (COVID-19) woes from Asia and China’s dislike for Aussie rejection to Belt and Road initiative haunt back the optimists earlier cheering the Bank of Canada’s (BOC) moves. Also on the risk-negative side could be the US-China tussles and the tensions over Russia-Ukraine.

Alternatively, the US administration’s lifting sanctions over the Iranian central bank, the national oil and tanker companies, as well as steel, aluminum and other sectors, per the Wall Street Journal (WSJ), keep markets hopeful. On the same side were chatters over the strongest US economic growth since 1984.

Read: Fresh Aussie-China tussle, US infrastructure spending bill talks and covid woes can weigh on sentiment

Against this backdrop, S&P 500 Futures fail to extend Wall Street’s first positive daily performance in a week whereas the US 10-year Treasury yield refreshes weekly bottom around 1.538%, down three basis points (bps) to 1.53% by the press time.

Moving on, the AUD/USD prices may remain sluggish amid the pre-ECB trading lull. Though, the US figures on weekly Jobless Claims and monthly data on housing, as well as Chicago Fed National Activity Index, can offer intermediate direction. It’s worth mentioning that the risk catalysts stay on the driver’s seat and need special attention.

Read: European Central Bank Preview: Five reasons for Lagarde to lift the euro

Technical analysis

The short-term AUD/USD moves are trapped 50-day SMA level of 0.7720 and the weekly top near 0.7760.

 

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