Aussie seems to struggle against the dollar during early Thursday. Recovery in the US dollar and the coronavirus (COVID-19)-led lockdown in Victoria weighs down the Aussie pair.

The US dollar index (DXY) extends its recovery moves from early January lows, up 0.13% intraday, while following the firmer Treasury yields.

The recent increase in the covid infections led the Australian government to make an announcement on a seven-day lockdown in the second-largest state Victoria. Acting Premier James Merlino announced this move today morning, after the case recorded another 11 new cases in the last 24 hours.

The lockdown will apply to the entire state and will be in place until June 3, with people only allowed to leave their houses to get food, go to authorised work, give care, exercise or get a vaccination.

Prime Minister of Australia said that “Right now every support has been given to the Victorian government … and I have made it very clear to the Premier that any other additional support he requires he will receive.”

The Reserve Bank of Australia (RBA) is expected to reiterate that no tightening is likely before 2024 at its June policy meeting next week. Analysts also suspect the RBA will formally commit to another round of bond buying at its July meeting.

As per the recent data, Australia’s Private Capital Expenditure for the first quarter (Q1) has crossed the 002.0% market consensus and 3.0% previous readouts with a 6.3% jump. Elsewhere the latest payroll job numbers released on Tuesday showed that the number of jobs is just over 1%. Whereas China’s Industrial Profits eased to 57.0%, below 92.3% YoY previous readouts in April.

AUD/USD 4 Hour Chart:

Support: 0.7715 (S1), 0.7690 (S2), 0.7650 (S3).

Resistance: 0.7780 (R1), 0.7820 (R2), 0.7845 (R3).              

US Durable Goods Orders for April and Weekly Jobless Claims may give further direction to the pair. In the meantime we expect a bearish trend for AUD/USD.