AUD/USD probes two-day winning streak, pressured above 0.6500 amid risk reset

AUD/USD struggles to extend the previous two-day rise.
US-China trade relations in doubts, tensions loom over Aussie-China future trade.
A triple anti-viral drug offers promising results.
A light economic calendar keeps trade/virus headlines in focus.

Anil Panchal FXStreet

AUD/USD begins the trading week on a back foot while taking rounds to 0.6515, following the early-day drop from 0.6530, amid the initial Monday morning in Asia. The Aussie pair earlier cheered improvement in the US-China trade relations. Though, the recent noise concerning Aussie-China trade future and US President Donald Trump’s mixed messages concerning China keep markets guessing.

Also read: What you need to know for markets opening: Nations reopening should be risk positive

Trade tension back in focus…

Having heard a few trade-positive headlines during last-week trade tussles are back to hound the market’s risk-tone.

While Friday’s talks between the US and Chinese policymakers struck an upbeat tone, US President Donald Trump’s recent messages have been mixed and renewed fears of the US-China trade war. The Republican leader said he is “having a very hard time with China” and that COVID-19 “sort of overrides so much”. He said, “I’m very torn, I have not decided yet if you want to know the truth.”

Further to highlight the trade war, the tension between Australia and China, as marked by China’s Global Times, also contribute to the Aussie pair’s fall. This seems to take clues from Australian PM Scott Morrison’s lobbying for an inquiry into the coronavirus (COVID-19) outbreak.

Alike trade news, virus headlines are also flashing mixed signals and exert downside pressure on the risks like the Australia dollar (AUD). Recent news suggests that some of the US policymakers including Vice President Mike Pence are self-isolating after an aide tested positive for the virus. On the contrary, news that a triple-drug is offering fast recovery from the virus infection also crossed wires.

Amid all these catalysts, risk-tone fails to carry the previous positive momentum and hence the S&P 500 Futures drop 0.50% to 2,917 by the press time.

Considering the lack of major data/events on the economic calendar, traders will keep eyes on the virus/trade updates for fresh impetus.

Technical analysis

Having failed to cross 100-day SMA, currently near 0.6540, AUD/USD can revisit 10-day SMA around 0.6480 whereas April high close to 0.6570 adds to the upside barrier.

Additional important levels

Overview
Today last price	0.6531
Today Daily Change	0.0000
Today Daily Change %	0.00
Today daily open	0.6531

Trends
Daily SMA20	0.6413
Daily SMA50	0.6286
Daily SMA100	0.6541
Daily SMA200	0.6674

Levels
Previous Daily High	0.6549
Previous Daily Low	0.6491
Previous Weekly High	0.6549
Previous Weekly Low	0.6372
Previous Monthly High	0.657
Previous Monthly Low	0.598
Daily Fibonacci 38.2%	0.6527
Daily Fibonacci 61.8%	0.6513
Daily Pivot Point S1	0.6498
Daily Pivot Point S2	0.6466
Daily Pivot Point S3	0.644
Daily Pivot Point R1	0.6556
Daily Pivot Point R2	0.6582
Daily Pivot Point R3	0.6614

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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