AUD/USD: Sellers flirt with 0.7300 as risk dwindles

• AUD/USD eases from 0.7310, fizzles bounce off 0.7288.
• Risks remain depressed as virus resurgence, US stimulus uncertainty dim vaccine hopes.
• Australia’s Wage Price Index for Q3, risk news should be followed for immediate direction.

AUD/USD remains depressed around 0.7300, fades corrective pullback from 0.7288, during the initial Asian session on Wednesday. The pair recently dropped from 0.7310 as global trading sentiment soured amid the coronavirus (COVID-19) worries. In doing so, the quote extenda pullback from the monthly high, flashed yesterday, while also respecting uncertainty over the US covid stimulus.

Vaccine hopes fizzle again…

Although updates from Moderna, Johnson and Johnson and Pfizer kept the global traders hopeful of overcoming the pandemic soon, virus numbers from the US and Europe threaten the optimism. The reason could be traced to the anticipated increase in the disease cases ahead of the vaccine’s arrival. The same push the European Central Bank (ECB) President Christine Lagarde to cite fears of the further economic downturn in 2021 while also causing French FinMin Le Marie to revise down GDP forecast from 8% to 6%.

On the other hand, the US Retail Sales also disappointed and portrayed the downbeat impact of the virus. State governments have been active off-late to avoid strict lockdowns by announcing various activity restriction measures. However, these measures don’t stop the virus to spread faster than the first wave in the world’s largest economy, as indicated by CBS News.

It should also be noted that the lack of clarity over the much-awaited US COVID-19 aid package also weighs on the risk tone. As a result, Wall Street benchmarks step back from Monday’s all-time high whereas the US 10-year Treasury yields also weaken to revisit 0.86% by press time.

Looking forward, Australia’s October month Westpac Leading Index, prior 0.22%, can offer immediate direction to the AUD/USD traders ahead of the third quarter (Q3) Wave Price Index, expected to remain unchanged at 0.2% on QoQ. However, major attention will be given to the risk catalysts for a clearer picture.

Technical analysis

An ascending trend line from November 02, at 0.7294 now, offers immediate support ahead of Friday’s low near 0.7220. It should, however, be noted that a break of 0.7220 will confirm “double-top” and can attack the 100-day SMA near 0.7160 during the further weakness. On the contrary, 0.7340/45 holds the key to AUD/USD upside towards the August 31 top near 0.7415.