- AUD/USD quickly reversed an early dip to sub-0.6100 level on upbeat Chinese PMIs.
- The USD benefitted from concerns over coronavirus crisis and capped further gains.
The AUD/USD pair struggled to capitalize on its goodish intraday bounce and quickly retreated around 40-50 pips from two-week tops, levels beyond the 0.6200 round-figure mark.
The pair quickly reversed an early Asian session dip to the 0.6080 region and rallied over 140 pips in reaction to upbeat Chinese macro data, showing a sharp rebound in manufacturing sector activity. In fact, the official Chinese Manufacturing PMI for March surpassed even the most optimistic estimates and jumped back in the expansion territory.
Adding to this, China's Services PMI also bettered market expectations and moved back above the 50 levels and underpinned the China-proxy Australian dollar. This comes on the back of a massive $2.2 trillion US stimulus package, which remained supportive of a further recovery in the global risk sentiment and benefitted perceived riskier currencies, including the aussie.
Despite the latest optimism, persistent worries about the economic fallout from the coronavirus pandemic continued lending some support to the US dollar's perceived safe-haven status. This eventually kept a lid on any strong follow-through gains, rather prompted some selling at higher levels and thus, warrants some caution before placing fresh bullish bets.
Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and Conference Board's Consumer Confidence index – in order to grab some short-term trading opportunities. Meanwhile, the key focus will remain on developments surrounding the coronavirus saga.
Technical levels to watch
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 stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.