AUD/USD: Bulls eye 0.7700 ahead of China PMI

• AUD/USD wavers in the 12-pip range after crossing late-April 2018 top.
• Cautious optimism in the market favored the mood, equities regain traction.
• China’s official NBS PMIs decorate the calendar, risk catalysts are the key.

AUD/USD bulls keep the reins inside the 0.7675-87 trading range, currently rising to 0.7685, during the early Asian session on Thursday. The aussie pair surged to the highest since April 2018 the previous day as the US dollar refreshed a multi-month low amid the market’s hope over the US coronavirus (COVID-19) stimulus and mixed updates from China. Traders currently await the official Manufacturing and Non-Manufacturing PMI numbers from China’s National Bureau of Statistics (NBS) for December while keeping eyes on the risk factors.

$2,000 paycheck has a bumpy road in the US Senate…

Despite Senate Majority Leader Mitch McConnell’s latest comments suggesting no realistic path for President Donald Trump-backed $2,000 paycheck bill to quickly pass, market players expect a sooner or later resolution to the much-awaited aid package. The reason could be the upcoming leader Joe Biden’s favor for the stimulus as well as Tuesday’s runoff in Georgia which will decide who holds the Senate’s control. In addition to the direct payments, US President Trump’s veto over the defense bill and protection to social media companies are also in the Congress for voting.

Other than the stimulus headlines, global markets also watched the covid numbers and updates for fresh impulse. While California recently followed Colorado to mark the second case of the covid strain in the US, vaccine developments indicate the path to recovery and placated the bears.

Additionally, China’s readiness to return two of 12 Hong Kong activists detained over border crossing issues joins the People’s Bank of China’s (PBOC) readiness to keep the monetary policy easy to favor the Aussie. It should be noted that China is Australia’s largest customer despite the recent tussle between Canberra and Beijing.

Against this backdrop, Wall Street benchmarks closed with mild gains near the record top marked earlier in the week whereas the US 10-year Treasury yields struggled for direction.

Looking forward, AUD/USD traders seek upbeat prints from China’s NBS Manufacturing PMI, expected 52.0 versus 52.1 prior, to keep the upside momentum. Also, any positive developments favoring the passage of the US direct payments can add strength to the north-run. Though, intraday sellers can look for a small disappointment to take fresh entries.

Technical analysis

Having successfully breached the 32-month top of 0.7675, AUD/USD is ready to challenge April 2018 peak surrounding 0.7815. However, the 0.7700 round-figure will offer an intermediate halt during the rally. Meanwhile, any downside below December 17 top near 0.7640 can probe the bulls for a short-term.