There aren’t a lot of top-tier reports on tap, which means that price action will likely take cues from broad risk sentiment.

How will the market themes affect AUD/USD’s range?

Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist checked out a key resistance level for CAD/JPY ahead of the BOJ’s policy announcement. Be sure to check that out to see if there is still a potential play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

  • Copper hits 10-year high on supply concerns, demand hopes
  • China’s industrial profits surge as output and prices climb
  • Musk says Tesla sold Bitcoin to prove liquidity as cash alternative
  • BOJ signals prolonged easing, cuts price outlook as new COVID pain hits
  • Asian shares wobble ahead of Fed outcome and earnings
  • Dollar near multi-week lows before Fed, bitcoin reclaims $54,000
  • European stocks weighed down by UBS’ Archegos hit, BP surges
  • After WallStreetBets, Australia’s securities regulator warns share trading forums

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K.’s CBI realized sales at 10:00 am GMT
  • U.S. house price index at 1:00 pm GMT
  • U.S. CB consumer confidence at 2:00 pm GMT
  • BOC Gov. Macklem to testify before the House of Commons Finance Committee at 8:00 pm GMT

What to Watch: AUD/USD

AUD/USD 1-hour Forex Chart

AUD/USD 1-hour Forex Chart

After getting spooked by Biden’s capital gains tax plans last week, Aussie bulls have charged back and have pushed AUD/USD to the .7800 area of interest.

Can the bears hold the range resistance zone? There won’t be top-tier reports printed during the U.S. session, so it’s likely that price action will come from broad market themes instead.

The Aussie can benefit from higher copper prices (Australia is the world’s third-largest copper exporter). Australia also has a CPI report coming up and some traders think inflation could be hot enough to up pressure on the Reserve Bank of Australia (RBA) to raise its rates in the foreseeable future.

However, Australia’s geopolitical tensions with China, its biggest export market, can make some bulls think twice about buying the comdoll.

And then there’s the upcoming FOMC statement. Word around is that Fed members will work hard to communicate their dovishness even as they cheer the economy’s rebound.

If traders prepare for the FOMC event by buying the Greenback against the “riskier” currencies, then we could see AUD/USD get rejected from the .7800 range resistance to test the SMAs near .7750 or the mid-range levels near .7700.

But if markets continue to hate on the dollar, or if we see a risk-friendly environment for U.S. equities and high-beta currencies, then AUD/USD can have a chance to bust through the .7800 handle and revisit its March highs.