- AUD/USD bears take a breather near the fresh low since December 2020.
- Covid conditions remain grim in Australia, National Cabinet meets today.
- US ISM PMI, Jobless Claims back hawkish Fedspeak and firmer USD.
- Virus news, NFP will entertain the markets, pre-data anxiety may curb moves.
AUD/USD remains depressed around the fresh low of 2021, flashed before a few hours, despite rejecting further downside below 0.7459 amid the early Friday morning in Asia. That said, the quote consolidates the recent losses near 0.7470 as the key day begins.
A sustained increase in the coronavirus (COVID-19) cases could be marked as the key catalyst behind the AUD/USD weakness. Also weighing on the quote are mixed data at home, in contrast to the firmer US economics and hawkish Fedspeak that underpin the US dollar strength.
Australia refreshed the 2021 covid count, unfortunately, with 49 new cases on June 30, per ABC News data. Following the news, state governments started pushing the center towards faster vaccinations and ease the rejection of AstraZeneca jabbing. However, nothing changed and the National Cabinet is up for a meeting today to discuss the level of inoculation required for unlock. The meeting may convey news on how to speed up the vaccination and hence AUD/USD traders will be interested in hearing more about AstraZeneca vaccine usage for fresh impulse.
Talking about data, Australia Trade Balance for May eased below 10000M forecast but Imports and Exports recovered. Further, China Caixin Manufacturing PMI eased below forecast and prior readouts in June. On the other hand, US ISM Manufacturing PMI came in a touch softer than 61.00 expected but the components are promising, especially the inflation one. Additionally backing the US dollar was the weaker-than-expected Weekly Jobless Claims and its four-week average.
Following the releases, Philadelphia Federal Reserve Bank President Patrick Harker told the Wall Street Journal that he supports the start of bond-buying pullback later this year.
It’s worth mentioning that the latest updates from the International Monetary Fund (IMF) revised the US GDP growth projection to 7.0% from 6.4% in April due to unprecedented fiscal, monetary support, which in turn backs the greenback bulls.
Amid these plays, Wall Street benchmarks remained firm for Thursday while the US 10-year Treasury yield added 1.5 basis points (bps) to 1.459%. Further, the US dollar index (DXY) rose to a fresh high in early April.
Looking forward, the pre-NFP trading lull may restrict AUD/USD moves amid a light calendar. However, the covid woes in Asia-Pacific and the recently hawkish Fedspeak may keep the bears hopeful.
Read: NFP Preview: Four reasons why June's jobs report could be a dollar downer
Technical analysis
A daily closing below 0.7477, the previous yearly bottom, directs AUD/USD bears towards August 2020 tops near 0.7415. Meanwhile, the 0.7500 threshold and 200-SMA near 0.7570 act as nearby hurdles to cross during the corrective pullback.
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 holds gains near 0.7000 amid PBOC's status-quo, Gold price surge
AUD/USD is clinging to mild gains near 0.7000 early Monday. The pair benefits from a risk-on market profile, China's steady policy rates and surging Gold and Copper prices. Focus now remains on Fedspeak for fresh impetus.
Gold price hits an all-time high to near $2,440
Gold price (XAU/USD) climbs to a new record high near $2,441 during the Asian trading hours on Monday. The bullish move of the precious metal is bolstered by the renewed hopes for interest rate cuts from the US Federal Reserve (Fed).
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
Week ahead: Flash PMIs, UK and Japan CPIs in focus. RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.