AUD/USD renews two-month high near 0.7300 as Aussie PM Morrison placates covid fears

• AUD/USD ticks up to refresh multi-day high during thee-day uptrend.
• Aussie PM Morrison said preventing everyone from getting the virus is not the objective, slams covid parties.
• Market sentiment dwindles post US inflation, ignores hawkish Fed comments.
• Fedspeak, US PPI eyed for fresh impulse, virus updates are the key too.

AUD/USD recently marked an uptick to print the fresh high since mid-November, around 0.7295, heading into Thursday’s European session.

The pair’s latest strength took clues from Australia Prime Minister Scott Morrison’s speech after the national cabinet meeting. The national leader crossed wires, via ABC News, after Australia refreshed record top infections and the supply chain constraints, as well as issues linked to virus testing kits, unearthed.

While conveying the cabinet decision to give concessional access for RAT kits, Aussie PM Morrison said, “Preventing everyone from getting the virus is not the objective,” while adding, “What we’re trying to achieve is to ensure that we can keep hospitals under the least pressure they can possibly be put on them.” The Australian leader also criticized covid parties while announcing the easing of restrictions for close contacts.

Elsewhere, recently hawkish comments from the Fed policymakers fail to lift the US dollar as markets remain divided over the US central bank’s next move considering the latest inflation data. US CPI jumped to the highest levels since 1982 while matching 7.0% YoY forecasts, up from 6.8% previous readouts. The monthly figures rose to 0.5% versus 0.4% expected but softened below 0.8% prior.

It should be noted, however, that virus woes and geopolitical tensions, especially concerning Iran, North Korea and China, challenge the AUD/USD prices of late.

That said, AUD/USD traders will pay attention to Fed policymakers’ speeches as they approach the blackout period before the monetary policy meeting, during January 25-26. Also important will be the US Producer Price Index (PPI) for December and weekly jobless claims.

Technical analysis

A clear upside break of the 100-DMA level surrounding 0.7290 becomes necessary for the AUD/USD bulls to aim for 61.8% Fibonacci retracement (Fibo.) of October-December downside near 0.7340. Otherwise, a convergence of the 50-DMA and 38.2% Fibo. will lure the sellers to recall 0.7210 on the chart.