• AUD/USD holds recovery moves from three-week low in a tight range.
  • RBA’s cautious optimism, downbeat data from Australia also favored bears.
  • Risk dwindles amid mixed signals from Yellen, US data and covid woes.
  • Second-tier Aussie data may offer immediate direction, risk catalysts stay on the driver’s seat.

AUD/USD fades bounce off three-week low while taking rounds to 0.7110-15 amid the initial Asian session trading on Wednesday. Even so, the Aussie pair refrains from declining further below the previous day’s low, also the lowest since April 14 as traders seek fresh direction after adhering to the bears the previous day.

Teasing bear’s return?

Following its multiple failures to cross 0.7820 during the latest April, AUD/USD dropped to the lowest in three weeks the previous day as downbeat data and the Reserve Bank of Australia’s (RBA) cautious optimism, not to forget risk-off mood.

Australia’s March month trade numbers came in weaker than expected ahead of the RBA’s comments suggesting extended easy money policies. Even so, the Aussie central bank revised up economic growth forecasts while cutting down on unemployment rate expectations.

Read: AUD/USD fails to cheer RBA’s cautious optimism above 0.7700

On the other hand, comments from US Treasury Secretary Janet Yellen troubled traders as she initially backed interest rate hike, indirectly, before saying, “not predicting or recommending” such moves.

Elsewhere, the coronavirus (COVID-19) tension escalates in Asia as Japan’s largest prefecture (by area) asked for further activity restrictions to tame the pandemic’s spread while India keeps suffering from the deadly virus despite global help.

Meanwhile, US trade figures and factory orders eased in March whereas vaccine developments have been positive of late.

Against this backdrop, Wall Street benchmarks closed mixed with Dow Jones Industrial Average’s (DJI30) bounce during the last hours. However, the US Treasury yields remain downbeat, propelling the US dollar index (DXY).

Moving on, AUD/USD traders may keep their eyes on the risk catalysts while the second-tier activity and housing numbers from Australia may also provide near-term direction. It should also be noted that the US ADP Employment Change and ISM Services PMI for April will be the key afterward.

Read: US ISM Services PMI April Preview: Inflation readings remain key as recovery gains strength

Technical analysis

Despite staying above the 0.7700 threshold and 50-day EMA level near 0.7710, AUD/USD needs to cross the 0.7770 hurdle to recall the buyers.