- AUD/USD edges lower inside a 10-pips range after three-day downtrend.
- Australia keeps local lockdowns, strict border restrictions amid virus resurgence.
- US dollar benefits from risk-aversion, upbeat data and the quarter-end moves.
- China Caixin Manufacturing PMI, Aussie Trade Balance will provide immediate direction, risk catalysts are the key.
AUD/USD seesaws around 0.7500, takes a breather following three-day fall to weekly low, amid the early Asian morning on Thursday. The Aussie pair’s latest south-run could be linked to the coronavirus (COVID-19) woes in Australia as well as the broad strength of the US dollar.
Major parts of Queensland, New South Wales, the Northern Territory and Western Australia witness local lockdowns with strict border control as the Oz nation struggles with the Delta variant outbreak. While the cases are mostly linked and marked traceable, the central government’s stand over ignoring AstraZeneca vaccine for blood clotting issue gets high criticism from states. It’s worth noting that a 4.0% fully-vaccinated Australian count pushes Canberra to speed up on its jabbing.
Other than the covid fears, China’s weaker-than-previous official PMIs and upbeat US ADP Employment Change for June also contributed to the AUD/USD pair’s weakness.
Additionally, the US dollar’s strength adds to the pair’s downside as the greenback gauge ended Q2 2021 with the strongest monthly gains in 4.5 years. While upbeat economics back hopes for firmer US NFP and keep the greenback stronger, uncertainty over the Fed’s next move and hawkish Fedspeak offer extra strength to the US currency. Recently, Fed's Robert Kaplan reaffirmed his hawkish stance and said, ''I’d want to taper sooner than the end of the year.''
Amid these plays, Wall Street marked mixed performance whereas the US 10-year Treasury yields dropped 1.2 basis points to 1.468%. Further, the US Dollar index (DXY) jumped to the highest since early April.
Looking forward, Australia trade numbers for May and China Caixin Manufacturing PMI for June will offer immediate direction to the pair, not to forget the covid updates and other risk-related headlines. However, major attention will be given to the US ISM Manufacturing PMI and Jobless Claims for the day as they will offer clearer signs for tomorrow’s US Nonfarm Payrolls (NFP).
Forecasts suggest a mixed view of the Aussie and China data to keep AUD/USD pressured towards the yearly low amid downbeat qualitative catalysts. However, any negative surprises from the US numbers may trigger the pair’s consolidation move later in the day.
Technical analysis
A pullback from the 0.7600 threshold precedes a clear downside past 200-DMA to keep AUD/USD bears directed to the year low near 0.7475 ahead of the August 2020 top around 0.7415. Meanwhile, any bounce below the 0.7565 level, comprising 200-DMA, becomes immaterial.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
![EUR/USD stays below 1.1050 as mood sours](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD stays below 1.1050 as mood sours
EUR/USD struggles to stage a rebound and trades below 1.1050 on Tuesday. In the absence of high-tier macroeconomic data releases, the negative shift seen in risk mood supports the US Dollar and doesn't allow the pair to gain traction.
![GBP/USD extends decline toward 1.3050](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-689067954_XtraSmall.jpg)
GBP/USD extends decline toward 1.3050
GBP/USD stays on the back foot and declines toward 1.3050 in the American session. Following a short lasting recovery attempt on UK employment data earlier in the day, the pair finds it difficult to holds its ground amid cautious market mood.
![Gold holds modest intraday gains above $2,510](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/safe-investment-gm147322399-17568598_XtraSmall.jpg)
Gold holds modest intraday gains above $2,510
Gold struggles to build on Monday's gains but manages to hold near $2,500 on Tuesday. Investors refrain from taking large positions ahead of Wednesday's highly-anticipated US inflation data for August, limiting XAU/USD's volatility.
![Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Prices/CPI/consumer-price-index-gm500080630-80587217_XtraSmall.jpg)
Five Fundamentals for the week: Jittery markets fear the ECB, US inflation and more Premium
Is there still a chance? Investors hope for a 50-bps rate cut from the Fed but also fear a global recession is underway. The world's three largest economies, the US, China, and the eurozone, are set to rock global markets.
![Dogecoin leads meme coin recovery following positive investor sentiment](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Dogecoin/Doge_Coin_31_02_XtraSmall.jpg)
Dogecoin leads meme coin recovery following positive investor sentiment
Dogecoin is up more than 8% on Monday, as it's leading the entire meme coin sector on a rebound. The top meme coin could see a massive rally if it completes a key move within a falling wedge.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.