AUD/USD moves back above mid-0.6500s ahead of US macro data, Australian CPI on Wednesday

• AUD/USD stages a goodish rebound from a one-week trough touched earlier this Tuesday.
• Reports that China will lift tariffs on Australian wine underpins the Aussie amid softer USD.
• Hawkish Fed expectations limit the USD decline and cap gains ahead of the US macro data.

The AUD/USD pair attracts fresh buyers near the 0.6525 area, or a one-week low touched earlier this Tuesday and builds on its steady intraday ascent through the first half of the European session. The momentum lifts spot prices back above mid-0.6500s in the last hour and is sponsored by a combination of factors.

The Australian Dollar (AUD) benefits from media reports, suggesting that China could lift the tariffs on Australian wine by the end of March. Apart from this, a modest US Dollar (USD) downtick assists the AUD/USD pair in reversing the previous day's downfall and stalling the recent pullback from a three-week peak touched last Thursday. A fresh leg down in the US Treasury bond yields, along with a stable performance around the equity markets, seems to undermine the safe-haven Greenback.

Any meaningful USD downfall, however, still seems elusive in the wake of expectations that the Federal Reserve (Fed) will wait until the June policy meeting before cutting interest rates. The bets were reaffirmed by the FOMC meeting minutes released last week and comments by several Fed officials, suggesting that the US central bank will stick to its hawkish stance amid sticky inflation and a still-resilient economy. This warrants caution before placing bullish bets around the AUD/USD pair.

Even from a technical perspective, spot prices remain below technically significant 100- and 200-day Simple Moving Averages (SMA). This further makes it prudent to wait for a convincing breakout through the said barriers before positioning for the resumption of the recent goodish recovery from the 0.6445-0.6440 region, or the YTD low touched earlier this February. Traders now look to the US macro data to grab short-term opportunities later during the early North American session.

Tuesday's US economic docket features the release of Durable Goods Orders, the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index. The focus will then shift to the Australian consumer inflation figures and the prelim US Q4 GDP on Wednesday. Traders this week will also confront the Australian Retail Sales and the US Personal Consumption Expenditures (PCE) Price Index on Thursday, which should provide fresh directional impetus to the AUD/USD pair.