AUD/USD supported by RBA, bullish plateau in commodities and coronavirus risk dissipation

  • Coronavirus risks brushed aside as market attention stays with the RBA's higher bar for cuts.
  • AUD supported on a bullish plateau in the commodity complex. 

Consolidating below the hourly trend-line resistance, AUD/USD  is currently trading at 0.6719 between a range of 0.6712 and 0.6733 in holiday thin markets and subdued price action. The markets are full of idiosyncrasy, relating to the coronavirus and complacency in the stock markets, distorting the regular flow of safe-haven money and speculative positioning in FX.

Money flows supporting both the Aussie and US dollar

The US dollar is one of the more unsurprising strengths, with USD net longs pushing higher for a third consecutive week due to its practical store of value for many investors. Despite the few disappointments in Friday's data, US growth data are still better than that of many other G10 countries. 

The Australian dollar, however, remains constructive for a possible inverted head and shoulders on the daily time frame as long positions continue to grow as a consequence to the lastest hints of optimism at the Reserve Bank of Australia. AUD net positions advanced by 5.5% of open interest, reducing the net-short exposure to -18%. 

Sentiment appears to be more positive in the bulk commodity sector, with iron ore recording its largest weekly gain since September –  a proxy for AUD. The markets assume the worst of the coronavirus impact on the global economy is behind them which is reflected through the CRB Index's steady gains, along with a bullish plateau in copper and oil prices with the energy sector leading the way. 

However, the momentum in the buying of AUD in spot FX has slowed, and given how exposed the Australian economy is to Chinese demand and not forgetting the bushfire emergency, fundamentally the case can still be argued for a downside extension.  It is still too early to completely move on from the threats of the virus and its economic impact –  it’s too difficult to judge how the economic effects of it will play out over the next ten days, let alone for the rest of the year and into 2021. The RBA's minutes this week could give clues as to what would force the RBA to reconsider its neutral stance.

Aussie Unemployment Rate in focus

Meanwhile, a period of consolidation could be expected – while the virus headlines and global factors remain key, the risks seem balanced in the near-term ahead of the Australian employment data which will also be scrutinised to see if it validates the more upbeat tone from the RBA. Governor Philip Lowe recently highlighted the risks to cutting do not outweigh the benefits and that the unemployment rate would need to deteriorate 'materially' for the Bank to consider cutting.

"Assuming the unemployment rate rises 0.1% per month, the earliest the RBA would cut is in June assuming a 5.5% print in May is considered a material deterioration," analysts at TD Securities explained. 

"We have headline at +12k, u/e rate at 5.2% and part rate unchanged at 66%. There is likely to be greater uncertainty for the Jan print. If the print is soft, finger will to bushfires. This should show up in total hours worked."

AUD/USD levels

Chart Of The Week: AUD/USD bulls advancing in bullish descending triangle within weekly support


Today last price 0.6717
Today Daily Change 0.0002
Today Daily Change % 0.03
Today daily open 0.6715
Daily SMA20 0.6753
Daily SMA50 0.6847
Daily SMA100 0.683
Daily SMA200 0.6856
Previous Daily High 0.6732
Previous Daily Low 0.6708
Previous Weekly High 0.6751
Previous Weekly Low 0.6661
Previous Monthly High 0.704
Previous Monthly Low 0.6682
Daily Fibonacci 38.2% 0.6717
Daily Fibonacci 61.8% 0.6723
Daily Pivot Point S1 0.6705
Daily Pivot Point S2 0.6694
Daily Pivot Point S3 0.6681
Daily Pivot Point R1 0.6729
Daily Pivot Point R2 0.6742
Daily Pivot Point R3 0.6753



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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD holds on to weekly gains near 1.0950

EUR/USD holds near 1.0950 amid broad-based dollar´s weakness. US dismal inflation passed unnoticed in holiday trading. Market cheers Eurogroup agreement on a rescue plan waits from G20 Energy Summit.


GBP/USD pressuring the 1.2500 threshold

Thin trading has kept GBP/USD at its 3-week tops just below the 1.2500 level. UK PM Johnson’s better health condition, and the broad US dollar´s weakness provide support.


Week ahead – China to reveal virus damage on GDP as markets cling onto optimism

As much of the world is stuck in a lockdown, one country where life has started to return to normal will shed some light on the toll of the virus outbreak on its economy as China reports GDP growth estimates. 

Read more

WTI slumps after Mexico rejects OPEC+ deal, G20 Energy Summit eyed

After witnessing a solid recovery in the final week of March, WTI (oil futures on NYMEX) resumed its bearish trend and lost nearly 18% this Easter holiday-shortened week. Day 2 of OPEC+ meeting and G20 Energy Summit in focus. 

Oil News

Gold: Corrects lower from tops around $1,690/oz

Prices of the ounce troy of the precious metal are fading part of Thursday’s advance to fresh monthly highs in the $1,690 region. The Fed’s latest stimulus package helped the metal’s upside. US CPI results coming up next on the docket.

Gold News