- AUD/USD seesaws between 0.7186 and 0.7200 following its highest levels since February 2019.
- Downbeat ADP, employment component of ISM Non-Manufacturing PMI weighed on the US dollar, gold surged to fresh record high of $2,055.69.
- Market sentiment cheers hope of further stimulus, virus woes, vaccine news play their part as well.
- A light calendar keeps risk catalysts on the driver’s seat.
AUD/USD eases to 0.7190 at the start of Thursday’s Asian session. In doing so, the aussie pair keeps its latest trading range following the pullback from a multi-week high of 0.7241. Although Wednesday’s run-up marks the second short trip beyond 0.7200, bulls remain optimistic considering the pair’s ability to carry the late-Monday recovery.
Risk-on mood ignores challenges to US NFP…
With the downbeat ADP Employment Change, +167K versus 1500K forecast, beating the strong ISM Non-Manufacturing PMI prints of 58.1, markets searched details of the US services gauge and realized a notable drop in the employment component. While the figures suggest downbeat Nonfarm Payrolls, up for publishing on Friday, markets remained mostly upbeat expecting the American Congress to agree on the much-awaited stimulus.
Recent comments from the House Speaker Nancy Pelosi suggest the Democrats are optimistic towards reaching a deal. Even if they fail, the While House Chief of Staff Mark Meadows said US President Donald Trump is ready to use an executive order to pass the bill.
The optimism surrounding additional stimulus also took clues from Japan and the UK while propelling Wall Street benchmarks for one more day. Additionally, the US 10-year Treasury yields rose 3.6 basis points (bps) to 0.549% by the end of Wednesday’s trading.
On the other hand, coronavirus (COVID-19) woes keep the bulls chained. The record of new cases in Victoria, +725, confronts stabilization in the numbers from America while global pharmaceutical companies flash positive results of initial trials. Further, second-tier Aussie data also came in mixed while China’s Caixin Services PMI slowed down to 54.1 from 56.8. It’s worth mentioning that the global rating giant S&P put Victoria’s AAA credit rating on a negative outlook on Wednesday.
Looking forward, traders will observe hints to the COVID-19 stimulus package while keeping eyes on other risk catalysts such as the Sino-American tussle, virus headlines and growth updates for fresh impetus.
Technical analysis
An area comprising 10-day EMA and a rising trend line from May 22, near 0.7110-0.7095 becomes near-term key support zone. On the upside, early 2019 top surrounding 0.7300 lures the bulls.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.