Today in the early European trading session, the AUD/USD currency pair succeeded to stop its previous session rapid declines and took fresh bids well above the mid-0.6800 level. That was mainly after the upbeat remarks from the Australian Prime Minister which underpinned 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 turned out to be one of the key factors that kept the currency pair higher. At the press time, the AUD/USD currency pair is currently trading at 0.6872 and consolidating in the range between 0.6846 and 0.6891.
At the coronavirus front, the virus fears were increasing in the world’s largest economy as pandemic has already crossed approximately half a million lives. Whereas Texas-registered consecutive seven days of above 5,000 cases by the weekend, whereas California’s State Health Department said claims rose by 4,810 to 211,243 total as of June 27. The figures from Los Angeles County rose by near-record of 2,542 to a total of 97,894 by Sunday.
The Texas Governor is set to stop reopening plans, and Vice President Mike Pence delayed visiting Florida and Arizona in the wake of intensifying concerns of the virus as the figures were rising from the US and Asia and Europe as well.
Despite this, the risk-sentiment recently got some support from the encouraging Chinese vaccine news. The “Chinese biopharmaceutical firm CanSino Biologics Inc. developed the vaccine in conjunction with a military research team.” which eventually provided some support to the riskier assets, including Aussie and contributed to the currency pair gains.
The reason for the currency pair gains could also be attributed to the upbeat statements by Australian Prime Minister (PM) Scott Morrison during the interview with 2GB radio on Monday about reopening up of the state borders in the country despite the sharp rise in the coronavirus outbreak in the no. 2 populous states of Victoria as he believed that the reopening of state borders would support jobs growth.
At the USD front, the broad-based US dollar failed to gain any new support. It continued moving into the previous losses as sentiment surrounding currency traders fluctuated between optimism over global economic recovery and worry as the number of coronavirus cases continues to grow. However, the losses in the US dollar turned out to be one of the key factors that kept the currency pair higher, at least for now. Whereas, the dollar index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 97.170 at 3 AM ET (0700 GMT).
Looking forward, the market participants will keep their eyes on the trade/virus updates due to the lack of significant economic data to be published today. On the other hand, the US housing data and regional Fed manufacturing indices will also be key to watch. Apart from this, the Tuesday’s official PMI figures from China and Thursday’s US employment data for June will be the key for this week’s calendar.
Daily Support and Resistance
S1 0.6757
S2 0.6812
S3 0.6839
Pivot Point 0.6867
R1 0.6894
R2 0.6922
R3 0.6977
The AUD/USD is trading within a symmetric triangle pattern, which is keeping the pair supported above 0.6850 level, along with a resistance level around 0.6900 and 0.6980. Blow 0.6980; we may see Aussie dollar falling towards 0.6800 support, While the bullish breakout of 0.6900 level can extend buying until 0.6979 level. The 50 EMA is neutral as the candles are tossing above and below this level, keeping it under pressure. Consider taking buy above 0.6867 and sell below the same today. Good luck!