AUD/USD stays firmer towards 0.7400 on coronavirus concerns
- AUD/USD picks up bids to intraday top but struggles to extend previous day’s gains.
- Victoria, South Australia up for easing local lockdowns, NSW spoils the mood.
- US Senators jostle over infrastructure spending, Sino-American tussles escalate.
- RBA’s Debelle, US Durable Goods Orders will be important for near-term directions.
AUD/USD edges higher around the intraday top, recently easing 0.7383, amid a quiet Asian session on Tuesday. The Aussie pair registered a positive daily closing the previous day as the covid counts eased in the Pacific major. However, the market’s cautious sentiment ahead of the key data/events, coupled with the US-China tension and US infrastructure spending deadlock, weighs on the prices.
With the lowest daily infections since July 15, Victoria is up for easing the lockdown restrictions while South Australia may also follow the suit with zero virus-related fresh cases. However, the authorities from New South Wales (NSW) are worried over the recent jump in covid numbers and death tolls, while also being criticized for vaccinations.
Elsewhere, the UK marked a sixth consecutive daily fall in the covid infections on Monday to a new low in over three weeks, to 24,950 on Monday from 29,173 on Sunday per Reuters. Though, the US fades victory over the pandemic and keeps borders closed amid fears of covid variant.
On a different page, US lawmakers remain at loggerheads over President Joe Biden’s infrastructure spending passage. The latest comments from US Democratic Senator Joe Manchin were, “Hell no, we're not pulling the plug”, tweeted CNN’s Manu Raju. It’s worth noting that China’s crackdown on technology talks and the Sino-American talks over the US visa restrictions on Chinese diplomats.
Amid these plays, Wall Street benchmarks posted record daily closings but S&P 500 Futures struggle of late. Further, the US 10-year Treasury yields remain firmer around 1.29% by the press time.
Given the lack of major data/events in Asia, AUD/USD traders will keep their eyes on the early signal for US Q2 GDP, namely Durable Goods Orders for June. Also important will be the comments from RBA Assistant Governor Guy Debelle.
Read: Durable Goods Orders Preview: Why expectations could be too high, data useful for trading GDP
Should the RBA official backs the Aussie central bank’s recently dovish forecasts and covid fears, coupled with the strong US data, AUD/USD may pare the latest gains.
Technical analysis
Despite overcoming a three-week-old resistance line, now support, around 0.7360, AUD/USD bulls need to cross 0.7440 hurdle, comprising 21-DMA and a descending trend line from June 11, to retake the controls.