AUD / USD retraces from month-long highs, failing again near 0.7815-20 hurdle

• AUD / USD is struggling to capitalize on its initial rally to the highest level since March 18.
• A good recovery in US bond yields eases downward pressure on the USD and limits the pair’s gains.
• Investors are now waiting for the release of US Q1 GDP for further momentum.

The pair AUD/USD It is back around 30-35 pips from the highs of more than a month reached earlier in the day at 0.7818. At the time of writing, the pair remains close to its daily lows just below the 0.7800 level.

The pair has built on the positive post-FOMC move of the previous day and gained some traction during Thursday’s Asian session. The US dollar fell to lows of more than two months in reaction to the pessimistic message from the Fed, which in turn has been seen as a key factor that has provided a modest rise to the AUD / USD pair.

It is worth remembering that on Wednesday the Fed refrained from hinting at a possible gradual reduction in QE and Fed Chairman Jerome Powell promised to analyze any temporary spike in inflation. Powell reiterated that additional substantial progress is needed before starting to talk about rolling back support. emergency to the economy.

This occurs amid underlying bullish tone in financial markets, which has driven some additional cash flows into the perceived riskier Australian dollar. Momentum has pushed the AUD / USD pair to the highest level since March 18, although the bulls have struggled to capitalize on the move and have once again failed near the 0.7815-20 resistance zone.

As investors have absorbed the FOMC’s decision, a good recovery in US Treasury yields has offered some support to the US dollar and limited strong gains for the AUD / USD pair. Despite the Fed’s reassurance of maintaining the current accommodative policy stance, rising inflation expectations have acted as a tailwind for US bond yields.

The focus of the market’s attention now shifts to the publication of the advanced report of the US GDP for the first quarter of 2021., which will be announced at the beginning of the American session today. The world’s largest economy is expected to have expanded at a solid annualized pace of 6.5% during the January-March period. A strong reading could prop up the USD and put some pressure on the AUD / USD pair.

AUD / USD technical levels