- The risk-on mood undermined the safe-haven USD and benefitted the Australian dollar.
- The optimism over a potential COVID-19 vaccine continued boosting investors’ confidence.
- The risk sentiment was further supported by Friday’s upbeat Chinese Services PMI print.
- Concerns about rising coronavirus cases capped the upside amid holiday-thinned liquidity.
The AUD/USD pair held on to its modest gains around the 0.6935-40 region and remains well within the striking distance of weekly tops set on Thursday.
Following the previous day's modest intraday pullback, the pair edged higher during the Asian session on Friday and was being supported by a mildly softer tone surrounding the US dollar. Optimism over a potential COVID-19 vaccine remained support of the risk-on mood, which undermined demand for the safe-haven US dollar and benefitted the perceived riskier Australian dollar.
The global risk sentiment was further supported by Friday's better-than-expected China's Caixin Services PMI, which jumped to the highest since April 2010 and came in at 58.4 in June. The data added to Thursday's stellar NFP report and offered further evidence that the worse of coronavirus pandemic was probably over, reviving hopes of a sharp V-shaped global economic recovery.
However, growing worries about a continuous surge in the number of coronavirus cases discouraged investors from taking excessive risk and kept a lid on any strong gains for the AUD/USD pair. Investors remain concerned that the continuous rise in COVID-19 cases across the world could trigger renewed lockdown measures to contain the spread and delay economic recovery.
Meanwhile, traders also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines amid relatively thin liquidity conditions. Given that the US markets will remain close in observance of Independence Day, the AUD/USD pair seems more likely to continue with its range-bound trading action, warranting some caution before placing any directional bets.
Technical levels to watch
|Today last price||0.6939|
|Today Daily Change||0.0016|
|Today Daily Change %||0.23|
|Today daily open||0.6923|
|Previous Daily High||0.6953|
|Previous Daily Low||0.6902|
|Previous Weekly High||0.6975|
|Previous Weekly Low||0.6811|
|Previous Monthly High||0.7065|
|Previous Monthly Low||0.6648|
|Daily Fibonacci 38.2%||0.6933|
|Daily Fibonacci 61.8%||0.6921|
|Daily Pivot Point S1||0.6899|
|Daily Pivot Point S2||0.6874|
|Daily Pivot Point S3||0.6847|
|Daily Pivot Point R1||0.695|
|Daily Pivot Point R2||0.6977|
|Daily Pivot Point R3||0.7002|
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.