AUD/USD aptly portrays market’s inaction below 0.7000, Aussie inflation, US GDP in focus

• AUD/USD clings to mild gains after snapping four-week uptrend.
• Risk appetite remains positive amid talks of soft landing, policy pivot in the US.
• China’s week-long Lunar New Year holidays, pre-Fed blackout restrict immediate moves.
• Australia CPI, US Q4 GDP will be crucial for fresh impulse.

AUD/USD seesaws around 0.6980-85 as it defends the week-start gains amid a sluggish Monday morning in Europe. In doing so, the Aussie pair remains mildly bid amid week-long holidays in China and the US Federal Reserve (Fed) policymakers’ stipulated off from the public appearances ahead of early February’s Federal Open Market Committee (FOMC) meeting.

It’s worth noting that the receding hopes of the global recession, as well as growing chatters surrounding the Fed’s policy pivot, seems to underpin the bullish bias surrounding the risk barometer pair AUD/USD.

Late the last week, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that the global “outlook is less bad than we feared a couple of months ago.” On the same line, JP Morgan Chase & Co. spotted seven indicators to suggest easing economic slowdown fears. Further, the US National Association of Business Economics (NABE) recently released a survey saying, “The likelihood that the United States is already in recession or will fall into one this year has dropped over the past three months to 56% from a nearly two-thirds possibility,” per Reuters.

Elsewhere, the Fed policymakers’ inability to convince of their hawkish bias, mainly due to the downbeat US data, joins optimism surrounding China to keep the AUD/USD buyers hopeful.

Amid these plays, the US Treasury yields remain pressured around multi-day, fading the last few days’ corrective bounces, while the US stock futures print mild losses and the Asia-Pacific equities trade mixed.

Given the lack of major data/events during the rest of the day, the AUD/USD pair may witness further grinding. However, Australia’s quarterly Consumer Price Index (CPI), up for publishing on Wednesday, will precede the US four-quarter (Q4) Gross Domestic Product (GDP) to entertain the pair traders.

Technical analysis

Bearish Doji on the weekly chart, that too exactly below the 200-SMA, teases AUD/USD bears.