AUD/USD sticks to mild gains above 0.6700 as US dollar fades recovery amid mixed sentiment

• AUD/USD consolidates the biggest daily loss since early March with mild gains, grinds near intraday high of late.
• US Dollar seeks fresh clues to extend previous day’s rebound from one-year low.
• China-linked headlines, light calendar allow Aussie pair buyers to reverses the pullback from multi-day top.
• RBA Minutes, China Q1 GDP and US PMIs are in the spotlight for fresh impulse.

AUD/USD treads water around 0.6710, licking its wounds after the biggest daily slump in six weeks, as market players seek fresh clues to extend the previous day’s moves heading into Monday’s European session. In doing so, the Aussie pair also takes clues from China, as well as the US Dollar’s retreat, to print mild gains of late.

That said, the weekend data suggesting a heavy jump in China’s New Home Prices for   March, the highest in 21 months, seem to underpin the AUD/USD pair’s recovery. Adding strength to the corrective bounce is the US Dollar’s retreat amid a reassessment of the previously hawkish Fed concerns.

US Dollar Index (DXY) eases to 101.60 as it fades the previous day’s rebound from the lowest levels in one year. It should be noted that the previous day’s mostly positive US consumer-centric data and hawkish Fed talks allowed the Fed bets to push back the odds of the Federal Reserve’s (Fed) longer pause to rate cuts after they stop the rate hike trajectory. Also, the US central bank is almost certain to announce a 0.25% rate lift in May.

It’s worth observing that an absence of a meaningful jump in the market’s hawkish Fed concerns joins the recent challenges to the US Dollar’s reserve currency status to also allow the AUD/USD rebound. Furthermore, hopes that the US will be able to overcome the debt default also underpin the cautious optimism in the market and allow the risk barometer pair to grind higher.

Alternatively, the Reserve Bank of Australia’s (RBA) pause to rate hike trajectory and the likely escalation in the US-China tension, due to Beijing’s ties with Russia, seem to keep a tab on the AUD/USD prices.

While portraying the mood, the S&P 500 Futures print 0.20% intraday gains as it reverses the previous day’s pullback from the highest levels since early February around 4,172. Further, the US 10-year and two-year Treasury bond yields pare the previous week’s 3.0% gains with minor losses around 3.52%% and 4.11% respectively.

Moving on, a light calendar restricts immediate AUD/USD moves ahead of Tuesday’s RBA Meeting Minutes and China's Q1 GDP.

Technical analysis

Despite the latest corrective bounce, the AUD/USD buyers remain off the table unless witnessing a clear upside break of the 0.6800 hurdle comprising a convergence of the 100-DMA and six-week-old ascending resistance line.