The AUDUSD is holding within narrow consolidation on Wednesday, after Mon-Tue bounce retraced over a half of last week’s sharp bearish acceleration which hit a multi-month low at 0.7106.
Fresh bulls faced strong headwinds from falling 10DMA (0.7252) while rising bearish momentum on daily chart also caused recovery to lose steam.
Traders await the outcome of Jackson Hole symposium which starts on Thursday with central bankers’ rhetoric likely to signal near-term direction.
Hawkish stance would inflate the US dollar on expectations for early tapering and policy tightening that would bring Aussie dollar under fresh pressure.
Also, deteriorating health situation on record new Covid-19 infections in some parts of Australia, would contribute to bearish sentiment.
On the other side, the Aussie would receive fresh boost if the US central bankers keep dovish stance, however overall picture would remain soured by worsened health conditions that may limit recovery.
Res: 0.7289; 0.7310; 0.7329; 0.7372
Sup: 0.7237; 0.7200; 0.7142; 0.7106