AUD/USD struggles below 0.7500 on mixed concerns, sour sentiment

• AUD/USD remains sidelined, pokes monthly support line amid a quiet session.
• Risk appetite worsens amid fresh covid fears from China, another Beijing-based firm’s nearness to bond default.
• Moody’s site Australia’s rising prices, stagnant wages, Fed tapering concerns remain elevated.
• Second-tier US data, risk catalysts in focus amid light calendar in Asia.

AUD/USD seesaws around 0.7470, flirting with the monthly support line near the one-week low. That said, the quote remains indecisive as contrasting headlines from China and home trouble traders.

Among them, fears of another COVID-19 wave in China battle positive headlines concerning Evergrande. Also in the play are the chatters over the Fed tapering and credit crisis of one more Chinese real estate firm. At home, vaccine optimism fails to stop the global rating giant Moody’s from conveying fears for Aussie housing markets.

As per the latest comments from Mi Feng, a spokesman at the National Health Commission, shared by Reuters, ''There is increasing risk that the outbreak might spread further, helped by ‘seasonal factors’”. On the other hand, Evergrande’s latest communication to have restarted 10 projects in six cities including Shenzhen tame fears emanating from the struggled real-estate player.

It’s worth noting that the US policymakers, including President Joe Biden, signaled nearness to the much-awaited infrastructure spending deal but there hasn’t been any notable progress and that adds to the market’s boredom. Also contributing to the latest risk-off mood is the Fed tapering concerns, recently backed by Federal Reserve Chairman Jerome Powell, as well as news that another real estate firm from China, namely Modern Land, is said to struggle to pay $250 million 12.85% senior notes due October 25.

Reuters came out with the news saying, “Australia looks to roll out COVID-19 booster shots soon as curbs ease,” which in turn keeps AUD/USD buyers hopeful amid the US dollar weakness. However, Moody’s comments like, “housing affordability in Australia will continue to worsen over the rest of 2021 and into early 2022 as property prices rise amid stagnant wages,” challenge the pair buyers.

Amid these plays, US 10-year Treasury yields remain pressured around 1.65%, after stepping back from a five-month high the last week, whereas the S&P 500 Futures drop 0.23% by the press time.

Considering a mixed play of catalysts, AUD/USD traders will wait for clearer factors for short-term direction. This may highlight today’s US Chicago Fed National Activity Index for September and Dallas Fed Manufacturing Business Index for October for immediate direction.

Technical analysis

Although overbought RSI dragged AUD/USD back from a 10-week-old resistance line, a monthly support line near 0.7460 restricts the quote’s short-term declines. In a case where bears manage to conquer the stated support line, the 100-DMA level of 0.7400 will be crucial to watch. Meanwhile, an upside clearance of the stated trend line resistance, around 0.7530, will direct the pair buyers toward the 200-DMA and late June’s peak, respectively close to 0.7565 and 0.7620.