AUD/USD: Bulls keep the reins with eyes on 0.7000 ahead of China CPI/PPI

• AUD/USD portrays a fourth attempt to pierce the key 0.7000 threshold.
• Broad US dollar weakness, upbeat equities and commodities helped Aussie to ignore pandemic fears.
• Australian policymakers escalate efforts to tame the coronavirus spread, US-China tussle intensifies.
• China inflation data, Australian housing market figures and US Jobless Claims to decorate the calendar.

AUD/USD again face a wall of resistance, 0.7000 threshold, while taking rounds to 0.6980 at the start of Thursday’s Asian session. The aussie has been attacking the psychological magnet since the week’s start but haven’t succeeded so far. That said, the quote flashed a positive daily closing the previous day, the second time in a week, despite worries concerning the coronavirus (COVID-19) resurgence and the Sino-American tension.

Bulls cheer gold’s glitter, stocks’ shine and greenback’s weakness…

Although pandemic concerns are turning worrisome in Australia and abroad, the AUD/USD buyers remain on the driver’s seat amid broad US dollar declines. The moves could also be attributed to Gold’s fresh high since 2011, to $1,818, as well as a mildly positive market performance by Wall Street and stocks in China.

In addition to recalling the lockdown in Melbourne and surrounding cities, the Aussie diplomats also announced a delay in the easing of lockdown restrictions in the Australian Capital Territory (ACT). The hearth of Australia has already shunned entries from Victoria and Melbourne. Further, Australian Treasurer Josh Frydenberg suggested an extension of the government’s income support schemes beyond the initial limit of September. Amid all these, cases in Victoria receded from 191 to 134 on Tuesday.

Over the counter, the US marked a record-breaking 60,000 new COVID-19 cases that propelled the total new count beyond three million. Considering the situation, US top health official Dr. Fauci shows a little optimism towards the vaccine which is likely to be available by the year-end. Even so, St. Louis Federal Reserve President James Bullard remains optimistic while anticipating softness in the Unemployment rate.

Elsewhere, the Trump administration continues to show its angst against China, mainly due to the latest Hong Kong security bill. The latest news suggests that the US diplomats are considering undermining the Hong Kong dollar peg after raising bars for Beijing policymakers for visas over Tibet issue. Though, China doesn’t care about it and opened a new security office in Hong Kong on Tuesday.

Against this backdrop, Wall Street benchmarks registered gains below 1.0% by the end of Tuesday’s trading while the US 10-year Treasury yields recovered around 1.8 basis points to 0.66%.

Moving on, traders might pause the run-up ahead of June month inflation data from the largest customer China. Forecasts suggest recoveries in the headline Consumer Price Index (CPI) data from 2.4% to 2.5% YoY whereas the Producer Price Index (PPI) is also expected to bounce off -3.7% to -3.2% on a yearly basis. Further, Australian Home Loans and Investment Lending for Homes, as well as weekly US Jobless Claims, are some other data that should be watched for immediate trade direction. However, all these shouldn’t dim the prospect of the virus updates and headlines concerning China to move the markets.

Technical analysis

The pair’s sustained trading beyond a confluence of 21-day SMA and an upward sloping trend line from May 15, around 0.6910/05, keeps it on the bulls’ radars. However, buyers remain cautious considering multiple failures to cross 0.7000, a break of which could escalate the north-run to attack June month’s high of 0.7065.