- AUD bulls await fresh impetus for the next push higher.
- Victoria’s coronavirus concerns cap the bounce in AUD/USD.
- Falling T-yields, rally in iron-ore and gold underpin ahead of US data.
AUD/USD is gathering pace for a sustained breakthrough the 0.7200 in the European morning, having reversed a dip to near 0.7150 region in early Asia.
The sentiment around the spot remains underpinned by broad US dollar weakness and tumbling Treasury yields across the curve. Record low US real yields make the higher-yielding AUD and US stock futures more attractive. Resurfacing concerns over the US economic recovery is underscored by the lower yields.
Further, the resource-linked aussie takes advantage of the rally in gold and iron-ore prices to fresh record highs and yearly tops respectively. Meanwhile, the Reserve Bank of Australia (RBA) AUD500 million bond purchases to support the economy also collaborates with an upbeat tone.
However, growing worries over the continued rise in the coronavirus cases in Australia’s no. 2 most populous state of Victoria could weigh on the aussie dollar’s upside. The state reported a daily record high of 725 and 15 death despite the border closure and fresh lockdown restrictions announced earlier this week.
Moreover, S&P Global Ratings placing Victoria’s AAA credit rating on negative watch also keeps the sellers hopeful ahead of the critical US ADP jobs and ISM Non-Manufacturing PMI reports. All eyes will also remain on the US fiscal stimulus talks for fresh impetus on the risk sentiment.
AUD/USD technical levels
The immediate upside will be tested at 0.7200 (round figure). The next resistance is aligned at 0.7249 (daily classic R3). On the flip side, the immediate support is seen at 0.7151 (daily low/ 10-DMA), below which the 20-DMA at 0.7080 could be tested.
AUD/USD additional levels
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