• AUD/USD stalls rebound amid growing Omicron concerns in Australia.
• DXY traders remain in a wait-and-see mode amid light trading.
• Focus shifts to US economic data for fresh trading impetus.

AUD/USD is defending minor bids above 0.7200, having staged a modest comeback from the Asian session lows of 0.7213.

The bulls are losing steam amid a cautious tone prevalent in the market, courtesy of the looming risks from the Omicron covid variant contagion.

Omicron covid cases exploded and the hospitalization rate rose across Australia on Wednesday, prompting Prime Minister Scott Morrison to schedule an emergency national cabinet meeting ahead of schedule on Thursday.

Earlier on, the aussie’s rebound was triggered by encouraging news on the Sino-Australian trade front. China’s Commerce Ministry announced that Beijing is raising the import quota on Australian wool in 2022 to 40,203 tonnes. The latest statement from China suggests easing of the trade tensions between the two close trading partners.

Amid thin year-end liquidity conditions, the US dollar and the Treasury yields remain on the defensive aiding the recovery in the aussie pair. The dollar bulls shrug off the rising inflation expectations and bets of March Fed rate hike, as year-end flows remain in play.

Next of relevance for the pair remains the US Trade data and Pending Home Sales for fresh trading impetus. Omicron updates worldwide will be also closely followed.

AUD/USD: Additional levels to consider