- AUD/USD remains modestly changed after a two-day winning streak.
- The US dollar witnessed pullback, risk-tone recovers.
- Comments from RBA’s heath largely ignored.
- Eyes on Australia’s Westpac Consumer Confidence, coronavirus (COVID-19) news from China.
AUD/USD stays within the four-hour-old range, between 0.6707 and 0.6716, while taking rounds to 0.6715 at the start of Wednesday’s Asian session. That said, the pair bounced off the decade low during the last two days as risk-tone improves. Even so, coronavirus risk remains on the cards while the US fundamentals are yet on the top of the major economies.
It should also be noted that the Aussie pair showed no major reaction to the RBA’s Alexandra Heath. The head of economic analysis crossed wires before few minutes while saying the outlook for consumption remains a major uncertainty.
Risk reset or recovery?
Market’s trade sentiment has recently improved amid updates suggesting that the coronavirus, officially called COVID-19 by the World Health Organization (WHO), the outbreak seems contained within China. The WHO mentioned that the first vaccine could be ready in 18 months. Also supporting the sentiment could be the Chinese government’s efforts to placate government.
Elsewhere, heads of the Fed, ECB and BOE all separately appeared for testimonies and refrained from being too dovish, despite citing coronavirus risk, which in turn seems to be risk-supportive.
While portraying this, the US 10-year treasury yields revisit 1.60% mark whereas Wall Street also registers another day of gains.
It’s worth mentioning that while the risk-tone has recently recovered, broad fears of coronavirus’ downside impact on the global economy remains on the card.
US dollar is destined to be the king…
Despite witnessing a pullback in recent days, amid a set of mixed second-tier data, headline economics concerning the US economy are strong enough. The same have recently helped the US Federal Reserve Chairman Jerome Powell and FOMC member Neel Kashkari to sound optimistic.
Looking forward, February month Westpac Consumer Confidence, expected +1.4% versus -1.8% prior, could offer the immediate direction whereas updates from China will also be worth watching. During the US session, the second day of the US Fed Chair’s testimony should entertain the markets.
Technical Analysis
While 10-day EMA around 0.6725 acts as the closest resistance, a downward sloping trend line from January 01, at 0.6750, becomes the key upside barrier. Alternatively, sellers will be on the lookout for entry below 0.6660.
FXStreet Indonesian Site - new domain!
Access it at www.fxstreet-id.com
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.