AUD/USD refreshes intraday high above 0.7800 on upbeat Australian Q4 GDP

AUD/USD takes the bids near 0.7835 following upbeat Aussie Q4 GDP print during Wednesday’s Asian session. The quote also benefits from risk recovery and hopes of the PBOC rate cut.

Australia’s fourth-quarter (Q4) GDP grew past 2.5% QOQ forecast to 3.1% whereas the yearly figures cross -1.8% expected and -3.8% previous readouts with -1.1% numbers. The data follows the RBA’s optimism and helps AUD/USD in reversing the previous week’s losses.

Read: Aussie GDP Q4 (QoQ): 3.1% QoQ, much better than expected, AUD bid

Other than the data, news from China, suggesting a cut in the People’s Bank of China’s (PBOC) reserve requirement ratio (RRR) this month join the recent risk-on mood to also favor the AUD/USD bulls.

Earlier during the day, market sentiment defied the previously cautious sentiment after US President Joe Biden show readiness to have vaccines for all of the American adults by May versus the earlier July deadline. Also on the risk-positive side could be the Financial Times (FT) news that teased the extension of the furlough scheme to September during the UK budget.

On the contrary, jittery markets ahead of Fed Chair Powell’s speech, on Thursday, as well as today’s UK Budget and Friday’s US employment data for February, challenge the market’s mood. Further, mixed comments from the RBA and the Fed policymakers, in an attempt to placate bond bears, offered extra support to the sluggish sentiment.

Against this backdrop, S&P 500 Futures recover the previous day’s losses by rising 0.30% whereas the US 10-year Treasury yields also seesaw around 1.41% by the press time.

Having witnessed the initial market reaction to upbeat Aussie GDP, AUD/USD traders will require welcome figures of non-manufacturing activities from China and the US to keep the upside moves intact. It should, however, be noted that further deterioration in the coronavirus (COVID-19) conditions, due to the variants, as well as any hints of reflation and/or disappointment from the UK budget could derail the latest run-up.

Technical analysis

A four-month-old ascending trend line and 50-day EMA, respectively around 0.7740 and 0.7700, could challenge the quote’s surprise declines while bulls need a clear break of 0.7880 to tighten the grips.