AUD/USD takes rounds to 0.6500 amid mixed fundamentals

• AUD/USD struggles to find direction following the recent declines.
• Aussie PM’s health package, actions join the broad US dollar pullback, coronavirus updates to portray the mixed scenario.
• Australia’s housing numbers flashed upbeat releases, a contrast to consumer confidence, whereas RBA’s Debelle turned down the odds of QE.

With the mixed fundamental catalysts increasing worries of the Aussie traders following the early week’s declines, AUD/USD seesaws near 0.6500 amid early Wednesday.

The US dollar extends the early-day pullback mainly based on the Trump administration’s inability to offer any strong measures to counter negative implications of coronavirus (COVID-19) and rising cases of the pandemic. Adding to the greenback’s worries were doubts over US Vice President Mike Pence’s claim to have enough resources at the labs for testing as well as headlines from Global Times that warn over the US diplomats’ downplay of the disease.

On the other hand, Australian PM Morrison’s health package and extended travel ban to Italy, as well as comments from the RBA’s Debelle, manage to signal intermediate optimism for the Aussie.

As far as the economics are concerned, Australia’s Westpac Consumer Confidence for March lagged behind downbeat market consensus and prior readings to -3.8% whereas January month data for Home Loans and Investment Lending for Homes flashed positive signs concerning the housing market.

Elsewhere, fears of the deadly virus are regaining market attention after the heavy surge in numbers from Japan and South Korea, not to forget a sustained rise in the US and the UK statistics.

Amid all this, the market’s risk-tone also failed to extend the previous day’s recovery. The US 10-year treasury yields and Asian stocks aptly portray the trading sentiment while marking mild losses by the press time.

While COVID-19 headlines are likely to keep the driver’s seat, today’s US Consumer Price Index (CPI) data for February will also be the key amid rising calls of the Fed’s another rate cut in March. Forecasts suggest the headlines YOY figures soften from 2.5% to 2.2% while the CPI ex Food & Energy may remain unchanged at 2.3% and 0.2% on the yearly and monthly basis respectively.

Technical Analysis

21-day SMA level of 0.6615 and the short-term resistance line near 0.6645 can keep challenging the buyers targeting early February lows near 0.6660.