Today in the early European trading session, the AUD/USD currency pair flashed green but remained shy around below 0.70. However, the modest gains in the currency pair were bolstered by the modest upbeat trading sentiment underpinning the perceived riskier Australian dollar and contributed to the currency pair gains. The broad-based US dollar selling bias triggered by the declines in the US bond yields kept the currency pair higher. At the press time, the [[AUD/USD]] currency pair is currently trading at 0.6985 and consolidating between 0.6970 and 0.7001.
As per the latest report, the US cases crossed a 3.0 million mark with a rise of over 60,000. Moreover, the latest update from the Texas Health Department suggested new cases increase by 9,979 to 220,564 on Wednesday, the biggest daily increase since pandemic. On the other hand, the coronavirus cases in Tokyo dropped to 75, the first below-100 figures in the last 7-days. Apart from this, Victoria also marked a lower figure of 134 against 191 on the previous day. Moreover, China offered positive vibes about virus cases while keeping its zero virus case level, which helped the equity market limit its losses.
Despite concerns about the ever-increasing coronavirus cases worldwide, the incoming positive economic data continuously fueled expectations for a V-shaped global economic recovery that continuously provided support to the upbeat global risk sentiment and the recent rally in the equity markets.
On the other hand, the risk-sentiment recently got additional support from the encouraging Chinese vaccine news as Dr. Anthony Fauci said Phase 3 vaccine trials may begin at the end of July, and that he was cautiously optimistic for a vaccine by year-end. It should be noted that the researchers around the world are developing more than 145 vaccines against coronavirus. Whereas, there are currently 21 vaccines are in human trials as per the New York Times vaccine tracker.
As a result, the broad-based US dollar reported losses on the day, possibly due to the modest upbeat trading sentiment backed by the multiple factors that boosted the market sentiment. However, the greenback losses could be short-lived or temporary as the second wave of coronavirus continuously picks up pace in the US. However, the losses in the US dollar kept the currency pair higher. Whereas, the dollar index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 96.252, dropping over 1% over the last week at 2:55 AM ET (0655 GMT).
At the Australia-China front, the on-going tussle between the Australia-China recently got an additional boost mainly after Australia announced measures to support the Hong Kong (HK) residents early. Australia's Prime Minister (PM) Scott Morrison announced that they would suspend the HK's extradition treaty. As per the keywords, the "Immigration program offers opportunities to Hong Kong citizens." as well as he said, "Will be extending visas by five years from today for skilled and graduate visa holders."
Looking forward, the market traders look forward to the data of the US weekly jobless claims, which is expected 1375K against 1427K. As well as, the traders will keep their eyes on the virus updates and news concerning China.
Daily Support and Resistance
S1 0.6898
S2 0.6935
S3 0.6956
Pivot Point 0.6972
R1 0.6993
R2 0.7009
R3 0.7046
The AUD/USD pair is trading sideways between a tight trading range of 0.7000 - 0.6974 level as investors are looking for a solid reason to enter the market. On the 4 hour timeframe, the upward channel is keeping AUD/USD supported and may drive extended buying trend, especially if the 0.7000 resistance level gets violated. On the higher side, a bullish crossover of 0.700 level can extend buying until 0.7060, while support still holds around 0.6940. Good luck!