AUD/USD picks up bids to probe intraday high. Aussie Consumer Inflation Expectations reprint 3.5% for December, AU yields turn negative for the first time. Brexit drama extends while US policymakers jostle over the stimulus details. FDA vaccine approval, ECB will be the key risk events, US CPI can decorate the calendar.
AUD/USD stretches corrective recovery from 0.7425 to attack the intraday high near 0.7450, currently up 0.06% intraday at 0.7445, during early Thursday. In doing so, the pair consolidates the previous pullback from the highest since July 2018. It should be noted that the quote pays a little heed to the monthly inflation data.
The latest Australian Consumer Inflation Expectations for December remains unchanged at 3.5%. This suggests the Aussie customers pay a little heed to the latest spat with China while believing in the RBA’s measures to combat the virus-led economic weakness.
During the late Wednesday, the risk of a no-deal Brexit and a further delay in the US coronavirus (COVID-19) stimulus weigh on the risk sentiment while fetching the quote from the multi-month high. However, the passage of a stopgap funding by the US policymakers and the continuation of Brexit talks, at least until Sunday, for now, favored the quote’s retracement afterward.
The worsening virus conditions in the US and a lack of major data/events, coupled with the trader’s wait for the key ECB and the Food and Drug Administration’s (FDA) approval of Pfizer’s covid vaccine, also weigh on the risk-tone sentiment.
Against this backdrop, S&P 500 Futures struggle for a clear direction after stepping back from the record high the previous day. Further, Australia’s ASX 200 drops 0.40% while the Aussie government sells bills at negative yields for the first time.
Moving on, AUD/USD traders will keep their eyes on the virus and vaccine updates while the European Central Bank’s (ECB) anticipated easing may help the US dollar to remain positive. Additionally, the US Consumer Price Index (CPI) for November, expected to ease from 1.2% to 1.1% YoY, will also be important to follow.
Technical analysis
10-day SMA defends AUD/USD buyers around 0.7400 while also helping to target the lows marked in December and November 2017, respectively around the 0.7500 threshold and 0.7530.
