- AUD/USD holds on to recovery moves from 0.6840.
- Upbeat US data dims the risk-off mood despite coronavirus woes, the Hong Kong issue regains market attention.
- Aussie PM struck an upbeat statement, US Secretary of State Pompeo and WHO Director Tedros stood on the other side.
- China’s official activity data, comments from RBA’s Debelle will offer immediate direction ahead of Fed Chair’s Testimony.
AUD/USD takes the bids near 0.6873 during the early Tuesday morning in Asia. In doing so, the aussie pair adds gains to the US session pullback from 0.6840. Even so, the pair traders struggle for clear direction ahead of the key data/events during the final day of the quarter.
Virus woes dwindle amid upbeat US data…
With the global cases of the coronavirus (COVID-19) crossing 10 million, the World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus spread worrisome remarks. Having initially said “the worst is yet to come”, Mr. Tedros recently mentioned that the pandemic is speeding up. His remarks seem to take clues from the rising virus figures from the US and China.
The recent resurgence in the pandemic poured cold water on the face of the hopes of economies restart. After the previous announcements of a halt in various re-opening plans in Texas, the news of Arizona ordering a 30-day close of bars, clubs and gyms recently crossed wires and challenged the risk-tone sentiment.
However, the upbeat performance of the US Pending Home Sales and Dallas Fed Manufacturing Business Index helped Wall Street to end the first trading day of the week on a positive side. On the contrary, the US 10-year Treasury yields remain downbeat around 0.627%.
Other than the virus woes, comments of US Secretary of State, barring controlled defense exports to Hong Kong reignited the fears of the Sino-American tussle. Earlier on Monday, the prepared speech of the Fed Chair Jerome Powell’s Testimony, to take place on Tuesday, suggested that the outlook is "extraordinarily uncertain" and will depend both on containing the virus and on government's efforts to support the recovery. On the other hand, the prepared remarks of Treasury Secretary Steve Mnuchin struck an upbeat tone indicating that the US is on the part of recovery.
Elsewhere, Australian PM Scott Morrison, in an interview with 2GB radio on Monday, favored the further reopening of economies citing employment benefits.
Moving on, China’s official PMI data for June will precede comments from RBA Deputy Governor Guy Debelle to direct the pair’s near-term moves. The key NBS Manufacturing PMI is expected to soften from 50.6 to 50.4. RBA’s Debelle is up for speaking on “The RBA’s policy actions and balance sheet” at 02:30 AM GMT and might not refrain from the previous optimism unless citing fears of the virus, which in turn could weigh on the aussie pair, provided downbeat China PMIs.
Technical analysis
A three-week-old triangle formation between 0.6850 and 0.6925 restricts the pair’s immediate moves. Also, a 200-day SMA level around 0.6665 acts as extra support.
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