AUD/USD seesaws on the way to 0.7800 on better-than-forecast Aussie Q1 GDP
- AUD/USD prints three-day uptrend, attacks weekly top on better-than-forecast Australia Q1 GDP.
- Comments from RBA’s Jones and mildly bid risk barometers also favor the bulls.
- US dollar moves, RBA’s Debelle and qualitative catalysts should be traced for fresh direction.
AUD/USD gains another boost, in the form of Aussie Q1 GDP, to portray a three-day run-up during early Wednesday. That said, the Aussie pair refreshes intraday high near 0.7770, up 0.21% on a day, by the press time.
Australia’s first-quarter (Q1) GDP crossed downbeat forecasts of 1.5% QoQ and 0.6% YoY with 1.8% and 1.1% respectively. The upbeat growth figures propelled AUD/USD further towards the north as policymakers have been quite optimistic of late.
Read: Aussie GDP Q1: 1.8% vs 1.5% predicted, AUD a few pips better off
Earlier in Asia, Brad Jones, Head of Economic Analysis at the Reserve Bank of Australia (RBA) crossed wires, via Reuters, while portraying the economic scenario before and after the pandemic. Despite citing uncertainty over macro outlook, the RBA policymaker praised Australia’s ‘surprising’ strength of the economic recovery.
The joins the line with the RBA Governor Philip Lowe who teased July tapering the previous day by cheering the upbeat economics and keeping the current monetary policy intact, for now.
Other than the optimism at the RBA, hopes of strong economic growth backed by heavy stimulus and receding coronavirus (COVID-19) cases at home add to the AUD/USD strength. In addition to US President Joe Biden’s multi-billion-dollars worth of aid package, which is in pipeline, chatters of a $50 billion investment by the International Monetary Fund (IMF), the World Health Organization (WHO) and other institutions add to the stimulus hopes.
Additionally, receding fears of reflation, backed by recently soft early signals of price pressure, as well as the Fed’s rejection to tapering, favor the market’s risk-on mood. Given the AUD/USD pair’s status of a risk-barometer, the quote tracks risk catalysts such as S&P 500 Futures. That said, the stock futures are mildly bid and so do the US Treasury yields, which in turn drag the US dollar index (DXY) and help AUD/USD bulls.
Looking forward, AUD/USD will seek upbeat comments from RBA Deputy Governor Guy Debelle to keep the run-up towards 0.7800. Also important will be the recently important catalysts concerning inflation, central bank actions and the covid.
A clear break above 0.7760 confluence, comprising a three-week-old resistance line and 21-day SMA, becomes necessary for AUD/USD bulls to regain the 0.7800 level. Failure to do so can drag the quote back to the 50-day SMA level near 0.7720.
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June 1, 2021 at 06:38PM