- AUD/USD wobbles in the middle of the two-week-old trading range between 0.7820 and 0.7700.
- Upbeat market sentiment battles bond bears, US-China trade jitters.
- US President Joe Biden seems up for $6.0 trillion budget, Treasury Secretary Yellen backs Fedspeak.
- Light calendar in Asia highlights risk catalysts as the key drivers, US Core PCE Inflation data is important.
AUD/USD is on the way to print the choppiest week since early April, offered near 0.7740 amid the early Friday morning in Asia. The Aussie pair ended Thursday near to the opening levels, despite bouncing off during the day-end, even as multiple catalysts brightened the market’s mood, which should have favored the risk-barometer pair.
Keep calm and ignore market noise”¦
AUD/USD seems to follow this mantra as the pair failed to portray Thursday’s volatile day, mostly optimistic. The reason could be traced to the lack of major data/events at home, as well as cautious sentiment ahead of today’s US Core Personal Consumption Expenditure (PCE) Price Index for April.
Among the sentiment-positive catalysts, chatters cited by the New York Times (NYT) concerning US President Joe Biden’s offer of a $3.0 trillion budget, versus a bit lesser than $1.0 counteroffer from Republicans, seem to propel the market’s mood. Also on the positive side were comments from US Treasury Secretary Janet Yellen who joined the Federal Reserve’s (Fed) chorus terming inflation risks as temporary.
Meanwhile, the Sino-American trade tussle is back on the table as Chinese policymakers’ push for a stronger tier with the US preceded the American acceptance of a bumpy trade ride with Beijing.
Not only the mixed risk catalysts but the scheduled figures like Aussie Private Capital Expenditure, US Q1 GDP and Durable Goods Orders also couldn’t properly direct the AUD/USD traders.
Amid these plays, Wall Street benchmarks trade mixed while the US dollar index (DXY) printed mild losses from a one-week high. Even so, the US 10-year Treasury yield jumped 3.2 basis points to regain 1.60% levels by the press time.
Given the mixed plays of sentiment and data troubling the AUD/USD traders amid a light calendar, AUD/USD traders will better wait for the US PCE inflation figures for a clear direction. Though, qualitative headlines could entertain the markets ahead of the US session open.
Read: US PCE inflation preview: Gold remains key asset to watch
Technical analysis
While the 0.7800 round-figure and 0.7820 restrict short-term AUD/USD upside, 100-day SMA near 0.7725 and a three-week-old support line near 0.7710 become crucial immediate supports to watch for the pair sellers.
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