Market mood AUD/USD – The AUD should remain under pressure after the Melbourne lockdown [Video]
|Listen to the latest market mood for the AUDUSD pair.
Asian equity markets and futures markets have traded mixed overnight. The Hang Seng -0.61% and the Shanghai Comp +1.46% are off their best levels for the day on a liquidity drain from the PBoC and with Chinese Press calling for rationality in the stock markets.
As the risk tone moderates, we can expect some support to come into the Dollar Index, so the USD should be supported on the day as long as the risk-on tone moderates. The AUD should remain under pressure after the country’s second-most populous state announced 6 weeks of stay at home restrictions and a lockdown for the city of Melbourne to curb rising cases.
Therefore, expect AUDUSD sellers from resistance.
Day trade outlook – We expect this trade to play out before the close of the US session, however, the trade will remain valid for as long as its underlying factors remain valid.
Trade Risks
- A lack of concern over rising US COVID-19 cases will invalidate this outlook.
- If we see a return to risk-on trading this will invalidate the outlook and support the AUD and weaken the USD.
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