- AUD/USD nears the upper-end of Monday’s trading range under 0.6200.
- The US dollar tried to recover some of the latest losses, President Donald Trump turned down hopes of economic restoration before Easter.
- Australian authorities signaled huge stimulus, around Australian dollar 80 billion, is on the way.
- Aussie Private Sector Credit, New Home Sales can offer intermediate clues ahead of China’s official PMIs.
AUD/USD seesaws around the higher limit of Monday’s trading range, between 0.6110 and 0.6185, while taking rounds to 0.6170 at the start of Tuesday’s Asian session. A glimmer of hope from receding cases in Italy and Spain, coupled with Aussie policymakers’ signals of further stimulus and disappointment from US President Donald Trump, helped the quote to remain on the front foot, with mild gains, during the previous day.
On Monday, Italy registered the lowest coronavirus (COVID-19) cases, 4,050, since March 17 whereas Spain also marked a reduction in the death toll to 812 from 838. On the other hand, the US continues to become the concern for the markets with cases rising to 140,904 from 122,653 while the death toll in the country stepping up to 2,405.
The Aussie PM Scott Morrison and Treasurer Josh Frydenberg showed readiness to announce big stimulus to regain the economic traction. Further, US President Donald Trump stepped back from earlier hints to reopen the economy by Easter. Additionally, comments from the recently convened G20 suggest that the World Bank pushed for slightly easy trading terms for pandemic goods and food. US Treasury Secretary Steve Mnuchin also said that the US overdependence on other countries for cheap medical supplies has created a strategic vulnerability.
Market’s risk-tone remains mostly lacking direction as the US 10-year treasury yields remained under pressure around 0.70% while Wall Street closed in the green for the first day of the week.
While second-tier Aussie data could offer intermediate moves to the pair, traders will keep eyes on China’s official PMI numbers for March. The headline Manufacturing PMI is expected to recover from 35.7 to 45 with Non-Manufacturing PMI likely inching up to 37.8 from 29.6 previous read-outs. Even if the data is expected to portray contraction in the activities, by remaining below 50.00, any recovery in the pace would be welcomed for further upside towards 0.6200.
Technical analysis
21-day SMA offers the immediate upside barrier around 0.6200 ahead of March 09 low near 0.6310. Alternatively, 0.6080, 0.6000 and 10-day SMA near 0.5960 could entertain sellers during the pullback.
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