AUD/USD holds above 0.7690 key support amid mixed clues
- AUD/USD defends short-term trading range after the heaviest monthly gain of 2021.
- US dollar gained on Friday amid covid fears, looming uncertainty over Biden’s stimulus.
- Mixed PMI from China, month-end moves also weighed on the quote.
- Second-tier Aussie data, risk catalysts will be the key, off in China, Japan can restrict market moves.
AUD/USD picks up bids around 0.7720, struggles to recover from short-term range support, amid the early Monday morning in Asia. The Aussie pair marked the biggest monthly gain in 2021, despite the recent pullback, in April. The downward pressure remains present at the start of May even as buyers defend 0.7700.
Bulls and bears jostle amid mixed clues…
Fears of delayed economic recovery from the coronavirus (COVID-19) and doubts over the US fiscal relief packages seemed to weigh on the market sentiment of late. Chatters surrounding “the one-jab isn’t enough to tame the covid” and worsening virus conditions in Asia backed the latest risk-aversion wave.
Also on the negative side could be the US Republicans’ firm rejection to support President Joe Biden’s stimulus amid tax hike concerns. On the contrary, US Treasury Secretary Janet Yellen recently said, during an NBC interview, “it would be ‘safest’ to include the means for President Biden's infrastructure plan to fund itself.”
Elsewhere, mixed activity numbers from China, Australia’s largest customer, as well as downbeat equities and stronger US dollar also dragged AUD/USD prices on Friday.
It's worth mentioning that faster vaccinations in the West and recently upbeat figures from most part of the globe keep traders hopeful.
Looking forward, AiG Performance of Mfg Index and Commonwealth Bank Manufacturing PMI will precede TD Securities Inflation for April to direct immediate AUD/USD moves. However, covid updates and other risk catalysts keep the driver’s seat. It should, however, be noted that a day off in Japan and China will restrict the quote’s performance in Asia.
Technical analysis
Lows marked during late February and April 22 portray 0.7690 as the key support to watch during the further weakness of AUD/USD prices, a break of which should recall 0.7660 and 0.7620 back to the chart. Meanwhile, 0.7760 and 0.7820 become strong resistance.