AUD/USD traders hold onto bullish bias around 0.6650, risk appetite, Fed Minutes eyed
- AUD/USD defends a 13-day-old ascending support line, prints mild gains of late.
- Market sentiment remains mildly bid amid a light calendar, pre-data/event anxiety.
- Downbeat Aussie PMIs, mixed concerns over China keep buyers hopeful to confirm the Fed’s 50 bps rate increase in December.
AUD/USD remains mildly bid around 0.6655-50 during early Wednesday, keeping the previous day’s rebound from two-week-old support amid mixed concerns. The Aussie pair’s latest inaction also suggests the indecision among the pair traders ahead of the key US activity data for November, as well as cautious mood ahead of the Federal Open Market Committee (FOMC) Meeting Minutes and the US Durable Goods Orders for October.
Meanwhile, China’s coronavirus conditions continue to worsen as the Daily cases head towards the record top marked in April while Chengdu announces mass COVID-19 testing for its residents from November 23 to 27. It’s worth noting that Beijing reported 388 symptomatic new locally transmitted COVID-19 infections and 1,098 asymptomatic cases for Nov. 22, local government authorities said on Wednesday, per Reuters.
Elsewhere, hopes of resumption of cordial relations with China joined the recently firmer equities and downbeat US Treasury yields to propel the AUD/USD bulls despite witnessing softer Aussie PMIs for November.
“Defence Minister Richard Marles said China’s willingness to reengage was expressed during a bilateral meeting on Tuesday with his Chinese counterpart General Wei Fenghe, their first since the Shangri La dialogues in Singapore in June,” Mentioned the Australian Financial Review (AFR) news.
On a different page, Richmond Fed Manufacturing Index improved to -9 for November versus -10 prior while Kansas City Federal Reserve President Esther George recently said, “(We) could well take a higher interest rate for some time to convince households to hold on to savings.” Earlier in the day, Australia’s S&P Global Manufacturing PMI eased to 51.5 versus 52.4 expected and 52.7 prior whereas the Services counterpart dropped to 47.2 from 49.3 previous readings and 49.1 market forecasts.
Against this backdrop, stocks in Europe and the UK, as well as Wall Street, closed positively whereas the US 10-year Treasury yields dropped six basis points (bps) to 3.76%. That said, the benchmark bond coupons remain mostly unchanged near 3.75% while S&P 500 Futures struggle for clear directions near 4,011 at the latest.
Moving on, traders will look for clues of more confirmatory signals for the economic transition and the Fed’s 50 basis points (bps) worth of rate hike in December to determine the short-term AUD/USD moves. That said, the preliminary readings of November’s PMIs. Also important will be the Federal Open Market Committee (FOMC) Meeting Minutes and the US Durable Goods Orders for October are important for clear directions.
Technical analysis
Despite the latest rebound from a two-week-old ascending support line, currently around 0.6625, AUD/USD bears remain hopeful as the monthly peak surrounding 0.6800 challenges the upside momentum. It’s worth noting that the Relative Strength Index (RSI) placed at 14 joins the recently softer signals from the Moving Average Convergence and Divergence (MACD) to challenge the AUD/USD buyers.