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  • A combination of factor failed to assist AUD/USD to capitalize on its intraday move up.
  • Fresh COVID restrictions in Australia, a softer risk tone capped the upside for the aussie.
  • Investors also seemed reluctant to place any aggressive bets ahead of the US macro data.

The AUD/USD pair seesawed between tepid gains/minor losses through the first half of the European session and was last seen trading in the neutral territory, just below mid-0.7700s.

The pair found some support near the 0.7725-20 region on Wednesday and for now, seems to have stalled the previous day’s rejection slide from the vicinity of the 0.7800 mark. The intraday uptick lacked any obvious catalyst and remained capped amid a combination of factors.

Australia’s second-most populous state Victoria will enter a seven-day lockdown at midnight on Thursday to counter a fast-spreading outbreak. This was seen as a key factor that acted as a tailwind for the aussie and kept a lid on any meaningful upside for the AUD/USD pair.

On the other hand, a modest uptick in the US Treasury bond yields and a softer tone around the US equity futures helped to put a tentative floor under the safe-haven greenback. The USD was also supported by indicators that the FOMC is edging closer to begin a discussion about tapering.

That said, caution ahead of key US economic data coming out on Thursday and Friday held traders from placing any aggressive bets around the AUD/USD pair, at least for now. This was seen as another factor that contributed to a subdued/range-bound price action on Thursday.

Thursday’s US economic docket features the releases of the Prelim Q1 GDP, the usual Initial Weekly Jobless Claims, Durable Goods Orders and Pending Home Sales. The data might influence the USD, which along with the broader market risk sentiment might provide some impetus to the AUD/USD pair.

Technical levels to watch