AUD/USD eyes Jackson Hole Symposium to seesaw beyond 0.7200
|- AUD/USD bulls catch a breather following a two-day winning streak.
- US dollar losses, Wall Street strength help Aussie to remain strong.
- Sino-American tension over the South China Sea, virus woes in Europe join cautious moves ahead of the key day.
- US GDP and Fed Chair’s Powell’s speech will be crucial to watch.
AUD/USD trades near 0.7235 amid the early Thursday morning in Asia. The aussie pair became the biggest G10 gainers the previous day but have been sluggish since the day began for Asian traders. While the greenback’s second-day of losses joined upbeat performance of equities and commodities to help the quote on Wednesday, a lack of data/events and worries before the key events could be cited as portraying the latest choppy moves.
Powell’s power-run or just hype?
With the Jackson Hole Symposium grabbing all the market attention, traders await the Federal Reserve (Fed) Chair Jerome Powell’s speech, up for publishing at 14:00 GMT, to get the hints of September month policy meeting. The latest rumors suggest the Average Inflation Targeting (AIT), a measure favoring further easy money policy, is on the cards. Though, chatters over the growth stories can’t be ignored. It should also be noted that the US second quarter (Q2) GDP, expected -32.5% versus -32.9%, precedes the speech and will be the key to watch as well.
During Wednesday, global markets initially cheered stabilization in the latest coronavirus (COVID-19) numbers in the Asia-Pacific and America before the mood soured over surging new cases from Europe. Also recently challenging the risk-tone sentiment is news that China fired missiles in a military drill near the South China Sea while the US government prepares sanctions for companies supporting China to “reclaim and militarize disputed outposts”, as per the US Department of Commerce. Even so, the hopes of the phase-one deal refrain from abating.
Against this backdrop, the US equity benchmarks flashed another positive day with the American 10-year Treasury yields inched closer to 0.70% with mild gains at the end of Wednesday’s North American session. Though, the S&P 500 Futures drop 0.14% to 3,475 by the press time.
Looking forward, a light calendar will add to the traders’ worries before the key US session begins. However, market talks surrounding the US stimulus, COVID-19 update and the US-China tussle may offer intermediate entertainment.
Technical analysis
The pair’s sustained break of 0.7200 enables it to refresh the yearly top near 0.7280 with the early-month tops close to 0.7245 acting as the immediate resistance. Meanwhile, a 21-day EMA level of 0.7170 can entertain the bears during the fresh declines past-0.7200.
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