- AUD/USD flirts with the 0.7800 round-figure, after refreshing weekly high with 0.7795.
- DXY marks the heaviest drop in one month, US 10-year Treasury yields waver around 1.52%.
- US President Biden signs $1.9 trillion covid stimulus bill, ECB maintained status-quote by signaling higher pace of bond purchase.
- No major data at home, US President Biden’s speech will be the key.
AUD/USD eases from the recently flashed weekly top of 0.7795 to 0.7785 during the early Friday morning in Asia. In doing so, the aussie pair buyers catch a breather after rising for three consecutive days as the market optimism keeps the US dollar pressured.
Are good days back?
US President Joe Biden signed his much-awaited coronavirus (COVID-19) relief package and is rumored to have another stimulus, estimated worth $2.5 trillion, of infrastructure plan in the pocket that investors should cheer. The European Central Bank (ECB) kept monetary policy and rates unchanged, as expected, but signaled the increased pace of bond purchases in the coming quarter than the initial months of 2021.
Also on the risk-positive side could be the steady vaccinations, except for fresh fears from the AstraZeneca shots, as well as the strong housing market in Australia and the Aussie government’s readiness to boost the domestic aviation industry.
The aforementioned catalysts propelled the S&P 500 and DJI30 to join Russell 200 to close at the record high by the end of Thursday’s North American session. Additionally, the US dollar index (DXY) dropped the most since early February, down for three consecutive days, to 91.40 by the press time.
Even so, the US 10-year Treasury yields remain mostly unchanged, mildly positive around 1.52%, as the ECB cited hidden risks from the increasing Treasury yields and more funds from the US are likely to hit the markets. On the same line, the Australian JobKeeper program is expiring this month and is expected to have a strong negative impact on the labor market.
Hence, the recent positive market signals aren’t the one-way push to the north, there are bumpers to take care of.
Given the light calendar in Asia, US President Joe Biden’s speech on the anniversary of the first virus-led shutdown in the nation, up for publishing at 01:00 AM GMT, will be the key to watch. Although US President Biden isn’t expected to roll out any surprises, AUD/USD bulls may look for clues to the next stimulus.
Technical analysis
Having successfully regained past-50-day SMA, currently around 0.7740, January’s top near 0.7820 and the monthly peak surrounding 0.7840 will test the AUD/USD upside.
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