- AUD/USD extends bounce off 0.7723 but challenges to risks probe buyers.
- US jostles with China, North Korea and Russia at the same time but Japan beats it with additional tariffs on beef.
- Europe’s virus woes join cautious optimism of RBA’s Kent to add more filters to the risks.
- Nothing gains more importance than the Fed meeting chatters.
AUD/USD consolidates the early Asian losses while picking up bids to 0.7735, off intraday low of 0.7723 but still down 0.10% on a day, amid initial Wednesday’s trading. In doing so, the quote prints a three-day losing streak amid multiple challenges to risk.
Among them, today’s monetary policy meeting by the US Federal Reserve gains the first spot followed by fears of employment backlash as the Aussie government’s job relief package expires in March.
Also on the same side are the fresh Sino-American tussles over Taiwan ahead of this week’s key talks whereas North Korea’s warning to America and the US sanctions over Russia for election meddling are some extra hurdles to market sentiment. Furthermore, European dislike for AstraZeneca and Japan’s trade-punitive measures on the US beef also joins the line.
On the positive side, the RBA policymakers have been cautiously optimistic off-late despite fears of job fears. Also, US stimulus and hopes of faster economic recovery are battling the bears amid a light calendar.
Against this backdrop, S&P 500 Futures wobbles around record top whereas the US 10-year Treasury yield takes rounds to 1.62% by the press time. Stocks in Asia-Pacific are mildly offered with Chinese equities weighing on the mood.
Looking forward, the pre-Fed trading lull could keep troubling AUD/USD traders while the rejection of reflation fears and economic optimism may help the quote to recover recent losses.
An ascending support line from December 21, currently around 0.7655, lures the bears unless AUD/USD crosses the 21-day SMA level of 0.7782.
Credit: FX Street