AUD/USD bounces off intraday low to hold 0.7700 on PBOC status-quo

AUD/USD marks another refrain from breaking the 0.7700 threshold, currently down 0.30% around 0.7710, during early Monday. In doing so, the pair pays a little heed to the People’s Bank of China (PBOC) rate decision but struggles with the market mood.

The PBOC matched wide market forecasts while keeping one-year and five-year loan prime rates (LPR) unchanged at 3.85%, 4.65% in that order. It should, however, be noted that the PBOC Governor Yi Gang sound upbeat during his weekend comments suggesting, “China's total debt-to-GDP ratio, remains at a stable level, which helps create an environment less likely to spawn financial risks.”

Read: PBoC leaves one-year loan prime rate unchanged at 3.85%

It should, however, be noted that the risk remains as the key catalyst amid a light calendar. This weighs on the AUD/USD prices amid the coronavirus (COVID-19) resurgence risk and the fears of reflation.

Also challenging the AUD/USD traders could be the strong US dollar after the President and CEO of the Federal Reserve Bank of Richmond Tom Barkin recently favored American fundamentals and rejected reflation fears.

Against this backdrop, S&P 500 Futures drop over 0.30% whereas the US 10-year Treasury yields drop 4.6 basis points (bps) to 1.686% by the press time.

Moving on, speeches from the key Federal Reserve (Fed) authorities could direct near-term AUD/USD moves but an upside is less likely unless the virus woes and vaccine jitters ease, which is less likely.

Technical analysis

A downside break of 50-day EMA, currently around 0.7720, directs AUD/USD sellers to the monthly low near 0.7620. Alternatively, bulls require a clear upside break of 0.7840 to recall the 0.7900 threshold on the chart. Above all, technical indicators suggest bears firmly hold the reins.