- AUD/USD eyes the upper-end of an immediate trading region.
- RBA’s Lowe copied the central bank’s downbeat comments but risk-on mood saved the day.
- Markets remain upbeat amid US stimulus hopes, vaccine news and welcome data.
- Aussie Trade Balance for goods, per preliminary release, grew $8,956M in December.
AUD/USD picks up bids above 0.7600, currently around 0.7625, during the initial hour of Thursday’s Asian session. Even so, the quote stays in the small range between 0.7600 and 0.7627. The aussie pair benefited from trade-positive sentiment and mostly welcome data despite RBA Governor’s downbeat comments. Australia’s December Trade Balance figures can offer fresh direction but the risk catalysts keep the driver’s seat.
Risk-on favors bulls but USD gains challenge AUD/USD…
US Democratic Party members are trying, by all means, to get President Joe Biden’s $1.4 trillion aid package through the Senate even as Republicans raise barriers. Also supporting the need for a heavy stimulus were recent comments from the Fed policymakers and Treasury Secretary Janet Yellen. The latest chatters suggest Republicans have eased their demand from a $600 billion asset package to somewhere near a $900 billion aid bundle while Democrats are pushing for a $1400 paycheck.
Other than the stimulus talks, vaccine news was also positive to the mood. Europe is up for getting more vials and fresh data concerning more vaccine trials convey optimism. Additionally, Switzerland and New Zealand give initial approvals to covid vaccines. It should be noted that the recently receding coronavirus (COVID-19) numbers also favor the market’s optimism.
Australia’s better than forecast Building Permits and a notable improvement in the US key figures, namely ISM Services PMI and ADP Employment Change, also helped the traders to remain positive. There are chatters that the ex-ECB President Mario Draghi's likely arrival as Italy’s Prime Minister offer distant positive to markets.
Amid these plays, Wall Street benchmarks closed mixed while the US 10-year Treasury yields grew 3.3 basis points to 1.14% by the end of Wednesday’s trading.
Looking forward, Australia’s Trade Balance for December, prior 5022M, is likely to offer immediate direction. Although preliminary figures for goods suggest improvement in data, any positive outcome may have a short-term reaction while odds of negatives to recall sellers are high. It’s worth mentioning that risk catalysts like US relief package news, COVID-19 and vaccine updates shouldn’t be missed as well.
Technical analysis
Despite bouncing off 50-day EMA, currently around 0.7595, AUD/USD buyers jostle with the one-week-old resistance line. Also acting as an extra upside filter is the 0.7640-45 area including multiple stops marked since December 17.
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
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.