AUD - Australian Dollar

The Australian dollar fell through trade on Thursday, giving up recent highs following a shift in risk sentiment. Having pushed through resistance at 0.6570, the AUD failed to extend gains beyond 0.66 and drifted lower as US-China tensions weighed on equity markets, souring demand for risk and forcing investors to adopt a cautious tone. Trump vilified China over its handling of the coronavirus, lashing out and suggesting their incompetence in managing the outbreak is the only reason the virus has spread so prolifically. In the same breath he denounced China’s new national security laws for Hong Kong, laws that could spark a fresh round of protests, suggesting the US will respond “very strongly” if the laws are enacted. In response China promised to safeguard its sovereignty and would retaliate if the US seeks to escalate tensions. The war of words has taken an alarming shift in recent weeks forcing investors to take stock as fears a renewed trade war will weigh on any short-term economic rebound. The AUD slipped back below 0.6450, touching 0.6447 before creeping marginally higher into this morning’s open.

The AUD has enjoyed a series of higher highs and higher lows this week bolstered by the increased optimism and opening of the broader global economy. Having failed to break above 0.66 US cents, topside gains will continue to be hard won, as risk sentiment continues to dominate direction and the H2 outlook softens. Watch resistance on moves approaching 0.66 with support well formed at 0.6430 and 0.6380 for now. With sentiment vulnerable to rapid corrections and the outlook into 2021 souring, the AUD will likely drift lower in the medium term holding above 0.60 but shifting back toward 0.62 by the end of June.

Key Movers

The US dollar advanced through trade on Thursday as escalating US China trade tensions prompted investors to adopt a more cautious tone as risk sentiment faltered. Despite another alarming uptick in unemployment claim filings, the USD found support as the impact of the global lockdown weighed on investors.

The Euro drifted back toward 1.0950 as optimism surrounding the Franco-German recovery fund proposal faded. Having jumped nearly 2% following the announcement earlier this week the combined unit struggled to maintain its momentum as fears US- China tensions will derail a short-term economic recovery. French, German and EU area services and manufacturing reports despite surpassing expectations, remain well below the level of expansion prompting investors to take stock and assess the broader impacts of the lockdown.

Attentions now turn to ECB policy meeting accounts for direction through trade on Friday. Investors will be keenly attuned to see if the ECB has amended its policy outlook following the German high court ruling earlier this month.

Expected Ranges

AUD/USD: 0.6430 - 0.6600 ▼

AUD/EUR: 0.5950 - 0.6050 ▼

GBP/AUD: 1.8380 - 1.8930 ▲

AUD/NZD: 1.0680 - 1.0780 ▼

AUD/CAD: 09080 - 0.9230 ▼

IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. Oz Forex Foreign Exchange makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.

Regulated in Australia by ASIC (AFS Licence number 226 484)
© 2010 Copyright Oz Forex Foreign Exchange Pty Ltd ABN 65 092-375-703
OzForex Foreign Exchange Services

Member of FOS (Financial Ombudsman Service)
Full Member of AFMA (Australian Financial Markets Association)

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD moves closer to 1.1100 amid upbeat market mood

EUR/USD is trading well above 1.1050, hitting new 8-week highs. US data was mixed with a ray of light coming from continuing claims. Hopes about the EU Fund and reopenings trump Sino-American relations.


AUD/USD retreats ahead of the close as US equities turn red

After spending most of the day within positive levels, US indexes turned south ahead of the close, dragging the Aussie alongside. AUD/USD still up for the day in the 0.6630 price zone.


Goldman Sachs puts Bitcoin on par with Gold

One of the world's largest investment banks, Goldman Sachs, announced a conference for its clients entitled “Implications of Current Inflation, Gold and Bitcoin Policies”

Read more

Gold: Limited gains below the $1730/oz level for XAU/USD

After bouncing from the 1690/1700 price zone XAU/USD is stalling below the 1730 resistance and the 50 SMA on the four chart. The picture is mixed as it seems the metal is challenging a tough resistance near the 1730 level.

Gold News

WTI oil prices rally on gasoline demand and hopes of output cuts’ extension

WTI crude oil prices have appreciated more than 5% on Thursday to reach $34 and approach two-month highs. Investors' optimism about an increase of gasoline demand and speculation of an OPEC+ deal to extend output cuts are driving crude prices higher.

Oil News

Forex Majors