- AUD/USD recaptures 0.7700 starting out 2021.
- Coronavirus woes, weak Chinese data prompt DXY’s pullback.
- Eyes on US ISM Manufacturing PMI, virus and Georgia Senate election updates.
Having ended 2020 on a solid note, AUD/USD kicks-off 2021 on the front foot, as the bulls manage to recapture the 0.7700 level.
However, the further upside appears elusive, as the US dollar attempts a tepid bounce from the 2-1/2-year troughs amid growing coronavirus concerns and weak Chinese PMI data.
The bulls remain weighed down by the below-forecast Chinese Caixin Manufacturing PMI, which arrived at 53.0 in December vs. 54.9 expectations.
Meanwhile, the advance in copper and gold prices somewhat offsets the corrective pullback in the US dollar index, keeping the bid tone intact around the aussie dollar.
From a broader perspective, the coronavirus-vaccine optimism driven expectations of a faster economic recovery continue to bode well for the riskier assets such as the aussie. Further, an easy monetary policy stance by global central banks in 2021 could also keep the buyers hopeful.
The pair awaits the US ISM Manufacturing PMI data for fresh trading impulse. Meanwhile, the virus developments globally and the Georgia Senate election will be closely eyed for fresh dollar moves in the first trading week of 2021.
AUD/USD technical levels
“Overbought RSI conditions and expected consolidation from multi-month high suggests a pullback in AUD/USD prices towards the mid-December 2020 top near 0.7640. However, a two-week-old ascending trend line near 0.7635 could restrict short-term downside. Alternatively, a sustained run-up beyond the year 2020 peak surrounding 0.7745 becomes necessary to recall the bulls targeting April 2018 high near 0.7815,” explains FXStreet’s Analyst Anil Panchal.
AUD/USD additional levels
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.