- AUD/USD concentrates more on upbeat CBA Manufacturing PMI to keep the previous day’s gains triggered by Aussie jobs data.
- Risk negative headlines from China joins trade war fears.
- Qualitative catalysts, US Markit PMIs will offer a busy day ahead.
AUD/USD stays on the front-foot while taking rounds to 0.6845 amid the initial Asian session on Friday. The pair recently reacted to the preliminary readings of the Commonwealth Bank (CBA) PMI details for January. In doing so, Aussie buyers paid a little heed to news concerning the outbreak of China’s coronavirus.
The CBA’s January month PMIs flash mixed results as the headlines Manufacturing PMI crossed 49.0 forecasts to 49.1 whereas Services PMI lagged behind 49.5 expected to 48.9. With this, the Composite PMI lagged below 49.6 prior to 48.6. Even if all of the activity numbers released by the CBA remained in the contraction region, traders favored the Aussie buying especially after Thursday’s welcome prints of jobs report that cut odds of the Reserve Bank of Australia’s (RBA) rate cut.
On the other hand, the market’s risk tone has been weighed down by the headlines coming from China that renews fears of Severe Acute Respiratory Syndrome (SARS) virus that resulted in 774 deaths in 26 countries during the year 2002/03. Although the World Health Organization (WHO) still needs some time to consider coronavirus as an international threat, there have been 17 deaths so far due to the same. The recent update concerning the virus outbreak comes from Japan that confirms the second case of coronavirus.
Elsewhere, the US is ready to extend its trade war to the European Union (EU) and the UK. While the UK might step back due to the better relations between the US President Trump and British PM Boris Johnson, the EU might stand tall due to being the largest customer of the US.
That said, the US 10-year treasury yields extend their south-run to 1.73% by the end of Thursday’s trading whereas the S&P 500 Futures recover mildly to 3,326 by the press time.
Moving on, headlines concerning the global trade and China’s coronavirus will be the key to watch. Though, the importance of the preliminary Markit PMIs from the US can’t be ruled out.
Technical Analysis
A confluence of 200-day SMA and monthly trendline, near 0.6880 limits the pair’s short-term upside.
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 extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.