AUD/USD: Consolidates run-up to 18-month top near 0.7200
|- AUD/USD seesaws between 0.7186 and 0.7200 following its highest levels since February 2019.
- Downbeat ADP, employment component of ISM Non-Manufacturing PMI weighed on the US dollar, gold surged to fresh record high of $2,055.69.
- Market sentiment cheers hope of further stimulus, virus woes, vaccine news play their part as well.
- A light calendar keeps risk catalysts on the driver’s seat.
AUD/USD eases to 0.7190 at the start of Thursday’s Asian session. In doing so, the aussie pair keeps its latest trading range following the pullback from a multi-week high of 0.7241. Although Wednesday’s run-up marks the second short trip beyond 0.7200, bulls remain optimistic considering the pair’s ability to carry the late-Monday recovery.
Risk-on mood ignores challenges to US NFP…
With the downbeat ADP Employment Change, +167K versus 1500K forecast, beating the strong ISM Non-Manufacturing PMI prints of 58.1, markets searched details of the US services gauge and realized a notable drop in the employment component. While the figures suggest downbeat Nonfarm Payrolls, up for publishing on Friday, markets remained mostly upbeat expecting the American Congress to agree on the much-awaited stimulus.
Recent comments from the House Speaker Nancy Pelosi suggest the Democrats are optimistic towards reaching a deal. Even if they fail, the While House Chief of Staff Mark Meadows said US President Donald Trump is ready to use an executive order to pass the bill.
The optimism surrounding additional stimulus also took clues from Japan and the UK while propelling Wall Street benchmarks for one more day. Additionally, the US 10-year Treasury yields rose 3.6 basis points (bps) to 0.549% by the end of Wednesday’s trading.
On the other hand, coronavirus (COVID-19) woes keep the bulls chained. The record of new cases in Victoria, +725, confronts stabilization in the numbers from America while global pharmaceutical companies flash positive results of initial trials. Further, second-tier Aussie data also came in mixed while China’s Caixin Services PMI slowed down to 54.1 from 56.8. It’s worth mentioning that the global rating giant S&P put Victoria’s AAA credit rating on a negative outlook on Wednesday.
Looking forward, traders will observe hints to the COVID-19 stimulus package while keeping eyes on other risk catalysts such as the Sino-American tussle, virus headlines and growth updates for fresh impetus.
Technical analysis
An area comprising 10-day EMA and a rising trend line from May 22, near 0.7110-0.7095 becomes near-term key support zone. On the upside, early 2019 top surrounding 0.7300 lures the bulls.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.