- AUD/USD keeps late-Friday pullback from 10-week low despite struggling around 0.7030.
- Market sentiment stays sluggish amid mixed clues, coronavirus woes keeps the US dollar strong.
- Increased expectations of American stimulus, recovery in technology shares and vaccine hopes signal light at the end of the tunnel.
- A light calendar keeps risk catalysts on the driver’s seat, traders may look for bright spots to extend the latest bounce.
AUD/USD seesaws near 0.7030/35 at the start of the week’s trading on Monday. The Aussie pair dropped to the lowest since July 20 on Friday before bouncing off 0.7004 by the end of the week. While the coronavirus (COVID-19) woes and the broad US dollar rally can be blamed for the quote’s weakness, recently positive signals concerning the US aid package and the virus vaccine indicate light at the end of the tunnel. However, those are still in the nascent stages and need back-up to perform.
Bulls defend 0.7000, but not for long…
With the run-up in equities during Friday, AUD/USD managed to keep 0.7000 despite fears of the pandemic. While cases continue to surge in the UK and Europe, not to forget India, Johnson and Johnson Inc. came out with the news suggesting a strong immune response to the coronavirus vaccine with a single dose in the early trial stages.
Elsewhere, US House Speaker Nancy Pelosi believes, per CNBC, that the COIVD-19 stimulus deal still possible as Democrats prepare a new package.
Furthermore, mixed clues concerning the final round of Brexit talks this week also play their role in determining the market sentiment.
Against this backdrop, Wall Street managed to please the bulls, backed by tech-shares, whereas the US 10-year treasury yields stood depressed near 0.65% by the end of Friday.
Considering the absence of any strong clues that could renew hopes of economic recovery amid the virus woes and the US-China tussle, AUD/USD is less likely to remain strong for long. Though, no major data/events on the calendar can keep traders guessing unless any news hints print the positive signs.
Technical analysis
Having bounced off 100-day SMA, currently around 0.7015/20, AUD/USD buyers can aim for June month’s top near 0.7065. Also acting as downside support could be the 0.7000 psychological magnet.
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
AUD/USD weakens further as US Treasury yields boost US Dollar
The Australian Dollar extended its losses against the US Dollar for the second straight day, as higher US Treasury bond yields underpinned the Greenback. On Wednesday, the AUD/USD lost 0.26% as market participants turned risk-averse. As the Asian session begins, the pair trades around 0.6577.
EUR/USD stuck near midrange ahead of thin Thursday session
EUR/USD is reverting to the near-term mean, stuck near 1.0750 and stuck firmly in the week’s opening trading range. Markets will be on the lookout for speeches from ECB policymakers, but officials are broadly expected to avoid rocking the boat amidst holiday-constrained market flows.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
Bitcoin price drops, but holders with 100 to 1000 BTC continue to buy up
Bitcoin price action continues to show a lack of participation from new traders, steadily grinding south in the one-day timeframe, while the one-week period shows a horizontal chop. Meanwhile, data shows that some holder segments continue to buy up.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.