AUD/USD: Post-Fed rally fizzles around 0.7800, second-tier Aussie data eyed

• AUD/USD struggles to keep the latest gains, wobbles in a choppy range.
• Fed widely matched status-quo expectations, Powell rejects talking about tapering.
• Aussie Q1 CPI, pre-Fed sentiment weighed down the quote before recovery.
• Australia Q1 Import and Export Price Index will offer immediate direction, Biden’s speech, risk catalysts are the key.

AUD/USD flirts with 0.7800, fading the Fed-led recovery move, amid the early Thursday morning in Asia. Fed Chair Jerome defends the US central bank’s easy money policy while being cautiously optimistic over employment and inflation. Downbeat Aussie Q1 CPI dragged the quote earlier on Wednesday before the Fed-led drama propelled the pair. Moving on, risk catalysts remain as the key but the US President Joe Biden’s speech and Australia’s Import Price Index and Export Price Index for the first quarter (Q1) will be crucial to follow.

Biden, Aussie data to keep markets busy after Fed…

US Federal Reserve (Fed) marched market consensus over no change in the benchmark interest rate, neither the bond purchase program, while marking economic recovery and the need for further stimulus. While the initial Fed announcement favored the US dollar, Chairman Powell drowned the greenback afterward by repeating that it is too early to think about tapering.

Overall, the week’s key event backed AUD/USD to recover early Wednesday’s losses, mainly due to the pre-Fed caution and mixed updates over the coronavirus (COVID-19), US stimulus and the vaccinations.

Against this backdrop, Wall Street closed mildly down while the US 10-year Treasury yield eased one basis point (bp) to 1.61% by the press time.

Having reaped the fruits of Fed-led drama, AUD/USD traders may keep their eyes on the covid and vaccine updates while waiting for US President Biden’s speech (around 01:00 AM GMT). As the Democratic Party member is up for addressing the Joint Congress for the first time as the US President, he may not disappoint markets and could unveil details of upcoming stimulus.

Additionally, Aussie Import Price Index for Q1 may drop further below -1.0% to -1.1% whereas the Export Price Index could ease from 5.5% previous readouts to 0.8% QoQ.

Hence, anticipated risk-on mood, due to the Biden’s speech and recovery in COVID-19 conditions in the West, not to forget faster jabbing, need strong Aussie data to keep the latest run-up.

Technical analysis

A confluence of the monthly support line and 50-day SMA, around 0.7720, offers a tough nut to crack for the AUD/USD amid upbeat RSI and Momentum. Meanwhile, the 0.7800 threshold, 0.7820 and March month’s top of 0.7850 are likely crucial hurdles to watch during the quote’s anticipated recovery.