- AUD/USD keeps pullback from 0.7108, snapped a three-day losing streak on Wednesday.
- Market sentiment improved on upbeat US data, no major negatives from US-China.
- S&P500 refreshed record tops, Gold also bounced from $1,860.
- US Senators struggle to renegotiate the stimulus, Australian employment for July will be the key.
AUD/USD eases from the previous day’s top, flashed a few hours back, to 0.7160 at the start of Thursday’s Asian session. Even so, the quote remains on the front-foot while carrying the U-turn from 21-day EMA. While broad risk-on mood could be cited for the pair’s earlier upbeat performance, doubts over the US aid package negotiations recently seem to exert the downside pressure.
Bulls cheer gains of equities, gold despite downbeat concerns at home…
Although Australia’s Wage Price Index and Westpac Consumer Confidence flashed unwelcomed figures the previous day, AUD/USD prices managed to snap the three-day declines. The reason could be traced from the market’s optimism surrounding the recovery in the world’s largest economy, as portrayed by the latest inflation data. Following the upbeat performance of the Producers Price Index (PPI), the US Consumer Price Index (CPI) also beat expectations while rising double the forecast of 0.3% to 0.6% in July.
Other than the upbeat data, an absence of negatives from the Sino-American tussle frontier also helped the trading sentiment to remain positive. Although US President Donald Trump said the phase one deal means “very little” to him, Chinese diplomats have off-late shown serious concerns to back the negotiations. The same could be witnessed in their agricultural buying from America, as per the White House Adviser Larry Kudlow.
Elsewhere, the coronavirus (COVID-19) statistics in the US have recently being doubted as the fall in the new cases joined a decline in the testing. On the other hand, Victoria’s also step back but stay above 400.
Against this backdrop, Wall Street flashed notable gains wherein the S&P 500 passed with flying colors by refreshing record high. The US 10-year Treasury yields also gained 1.5 basis points (bps) to 0.673% by the end of Wednesday.
Moving on, traders will keep eyes on July month's employment data from Australia. Forecasts suggest Employment Change drop from 210.8K to 40K with a rise in Unemployment Change to 7.8% against 7.4% prior.
It should also be noted that the recently grim words from US Treasury Secretary Steve Mnuchin probes the bulls and makes it important for traders to keep a watch on risk catalysts as well.
Technical analysis
The pair’s bounce off 21-day EMA enables it to attack 0.7200 immediate resistance ahead of the monthly top near 0.7245. On the downside, 0.7065/60 area comprising July 24 low and June 10 high can offer an extra support past-0.7115 level including the short-term EMA.
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 retreats to 1.0750, eyes on Fedspeak
EUR/USD stays under modest bearish pressure and trades at around 1.0750 on Wednesday. Hawkish comments from Fed officials help the US Dollar stay resilient and don't allow the pair to stage a rebound.
GBP/USD remains on the defensive around 1.2500 ahead of BoE
The constructive tone in the Greenback maintains the risk complex under pressure on Wednesday, motivating GBP/USD to add to Tuesday's losses and gyrate around the 1.2500 zone prior to the upcoming BoE's interest rate decision.
Gold fluctuates in narrow range above $2,300
Gold struggles to make a decisive move in either direction and moves sideways in a narrow channel above $2,300. The benchmark 10-year US Treasury bond yield clings to modest gains near 4.5% and limits XAU/USD's upside.
SEC vs. Ripple lawsuit sees redacted filing go public, XRP dips to $0.51
Ripple (XRP) dipped to $0.51 low on Wednesday, erasing its gains from earlier this week. The Securities and Exchange Commission (SEC) filing is now public, in its redacted version.
Softer growth, cooler inflation and rate cuts remain on the horizon
Economic growth in the US appears to be in solid shape. Although real GDP growth came in well below consensus expectations, the headline miss was mostly the result of larger-than-anticipated drags from trade and inventories.