AUD/USD marches towards 0.6800 as RBA’s Lowe tries to lure hawks, US data eyed

• AUD/USD picks up bids to reverse the previous day’s pullback from five-week high, mildly bid of late.
• RBA’s Lowe struggles to tame pessimism emanating from a pause in rate hikes.
• Market’s consolidation ahead of the key US data, RBA’s halt to rate lift after 10 such hawkish moves prod the Aussie bulls.

AUD/USD grinds near an intraday high surrounding 0.6770 as it pares the previous day’s losses after upbeat comments from Reserve Bank of Australia (RBA) Governor Philip Lowe early Wednesday.

The Aussie pair dropped the most in a week the previous day as the Aussie central bank paused a 10-time rate hike trajectory. However, RBA’s Lowe shows the readiness to resume the rate lifts while pushing back the doves and allowing the quote to remain firmer. “Decision to hold rates steady does not imply interest rate rises are over,” said the policymaker.

Also read: RBA’s Lowe: Decision to hold rates steady does not imply interest rate rises are over

It should be noted that the early-day releases of mixed Aussie PMIs and the latest corrective moves in the US Treasury bond yields and the US Dollar Index (DXY) seem to challenge the Aussie pair buyers ahead of the key US data. On the same line could be the hawkish comments from Federal Reserve Bank of Cleveland leader Loretta Mester.

Even so, the recent challenges to the US Dollar’s reserve currency status and downbeat US data weigh on the greenback and keep the AUD/USD buyers hopeful.

Amid these plays, the S&P 500 Future print mild gains even as Wall Street closed with minor losses. Further, the US 10-year and two-year Treasury bond yields also take a breather around 3.35% and 3.85% respectively, after falling in the last four and three consecutive days.

Having witnessed the initial reaction to RBA Governor Lowe’s speech, as well as mixed Aussie data, AUD/USD pair traders should focus on the US ISM Services PMI and ADP Employment Change for March for clear directions.

Considering the recently mixed concerns and the hawkish Federal Reserve (Fed) comments, upbeat figures of the scheduled US data can allow the AUD/USD pair to tease sellers.

Also read: US ADP Jobs/ISM Service PMI Preview: Slowing but still positive

Technical analysis

Unless crossing a convergence of the 50-DMA and 100-DMA, close to 0.6805 at the latest, the AUD/USD traders can aim for a corrective pullback towards the previous resistance of around 0.6750, comprising the 200-DMA.