AUD/USD sellers attack 0.7300 as cautious sentiment battle upbeat Aussie data, Ukraine, US inflation eyed

• AUD/USD renews intraday low, pares the biggest daily gains in a fortnight.
• Australia Consumer Inflation Expectations rose 4.9% for March.
• US Treasury yields, S&P 500 Futures retreat amid anxiety over Russia-Ukraine talks.
• US CPI for February also gets interesting as inflation expectations ease from record top.

AUD/USD takes offers to renew intraday low around 0.7305 as market sentiment turned cautious during the mid-Asian session on Thursday, following the risk-on day.

The Aussie pair snapped a two-day downtrend by rising the most in two weeks the previous day as risk appetite improved on the headlines suggesting a diplomatic solution to the Ukraine-Russia crisis. However, the market’s anxiety ahead of the key event and the recently mixed headlines challenged the previous optimism and weigh on the AUD/USD pair, due to its risk-barometer status.

As a result, AUD/USD ignores upbeat Australia Consumer Inflation Expectations for March, 4.9% versus 4.6% expected and prior.

Although Ukraine showed readiness to compromise if Russia also do the same, Moscow said, “Will not concede anything”. The same joined the White House (WH) comments to turn down the allegations over the usage of chemical or biological weapons in Ukraine.

Also important to note is the recent strong US inflation expectations, as per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, amid the fears of a 0.50% rate hike by the US Federal Reserve (Fed). The inflation gauge recently stepped back to 2.84% after refreshing the all-time high with a 2.90% figure the previous day.

At home, the market chatters that Australia Prime Minister (PM) Scott Morrison wants to spend A$38 billion to boost military forces were largely ignored amid the natural calamity at the Ease Coast.

Against this backdrop, the S&P 500 Futures and the US 10-year Treasury yields fail to extend the previous day’s gains by the press time.

That said, AUD/USD prices are likely to remain pressured heading into the key data/events. Among them, the progress on the peace talks becomes necessary for the pair to renew upside momentum. Otherwise, a firmer US Consumer Price Index (CPI) for February, likely rising to 7.9% from 7.5% prior, can favor the pair sellers.

Read: US February CPI Preview: Will hot inflation force Fed’s hand?

Technical analysis

Failure to stay beyond the 200-DMA, around 0.7315 by the press time, directs AUD/USD bears towards refreshing the weekly low. In doing so, the 100-DMA level of 0.7230 will be in focus.