AUD/USD remains confined in a range above 0.7200, US CPI eyed for fresh impetus
- AUD/USD oscillated in a narrow trading band through the first half of the European session.
- A positive risk tone, subdued USD demand acted as a tailwind for the perceived riskier aussie.
- Investors seemed reluctant to place aggressive bets ahead of the critical US consumer inflation.
The AUD/USD pair seesawed between tepid gains/minor losses through the first half of the European session and held steady near the weekly high, just above the 0.7200 mark.
The pair, so far, has struggled to gain any meaningful traction, or capitalize on the previous day's positive move and oscillated in a narrow trading band on Wednesday. Softer than expected Chinese inflation figures turned out to be a key factor that acted as a headwind for the Australian dollar. That said, a generally positive tone around the equity markets extended some support to the perceived riskier aussie.
On the other hand, the US dollar was weighed down by Fed Chair Jerome Powell's less hawkish comments on Tuesday and the recent pullback in the US Treasury bond yields. During his renomination hearing before the Senate, Powell said that it could take several months to decide on running down the central bank's balance sheet. This, in turn, kept the USD bulls on the defensive and helped limit the downside for the AUD/USD pair.
Investors, however, seemed reluctant and preferred to wait on the sidelines ahead of the US consumer inflation figures, due later during the early North American session. The data will play a key role in influencing the USD price dynamics and provide a fresh impetus to the AUD/USD pair. This makes it prudent to wait for a sustained move in either direction before positioning for any meaningful intraday movement.
Technical levels to watch