- AUD / USD catches its breath above 0.6500 after posting the largest gains in seven weeks.
- The optimism surrounding the virus vaccine, hopes for increased Chinese demand have exceeded the US-China conflict.
- Signs of further easing from the Fed, the BOE and Europe are also contributing to market optimism.
- RBA minutes become the immediate catalysts while viruses make the headlines, US / China news can keep traders busy.
AUD / USD bulls keep the reins, despite a break, while the pair swings around 0.6525 / 20 at the start of Tuesday’s Asian session. The pair posted the largest gains, about 1.7% a day, in seven weeks the day before.
Viral medicine is reviving the markets, central bankers / basic products are supporting the recovery…
Discussions of Moderna’s early success in testing coronavirus vaccines fueled the market’s sense of risk earlier this week. Optimism also took clues to signals of further easing from the US Federal Reserve, the Bank of England (BOE) and Europe.
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In addition, comments by Chinese President Xi Jinping that the development and deployment of China’s COVID-19 vaccine will be made public as soon as it becomes available and the commitment to provide $ 2 billion over two years to support the Fighting the virus also increased the positive risk. environment.
In addition, the Australian pair also benefited from the optimistic performance of oil and gold prices. Expectations that China returned to oil consumption levels before the virus spread has fueled energy prices, while gold has also cheered for the next wave of easy money at the multi-year high .
It should also be noted that these positive catalysts weighed on the headlines earlier this week regarding the US-China conflict and helped Wall Street post notable gains by Monday’s close. The sharp rise in yields and US Treasury bunds could also depict the mood of risk in the market.
For the future, the RBA minutes, published Tuesday at 01:30 GMT, will be the immediate catalyst to watch. With the Monetary Policy Statement (SOMP) already loud and clear, the minutes are less likely to get a lot of attention. However, traders will be interested in looking for signs of further easing and economic performance due to the virus in the release.
After the RBA minutes, US real estate market numbers and the testimony of Fed Chairman Powell will be the key to watch.
With a daily close beyond the 100-day SMA for the first time since late January, the AUD / USD appears poised to beat the April highs close to 0.6570. However, an SMA with 0.600 round number, an SMA of 200 days close to 0.6665 and a peak of March close to 0.6868 / 90 can question the bulls thereafter. Meanwhile, the pair’s drop below the SMA 100-day level of 0.6512 will require a clear break below the round figure of 0.6500 to recall Friday’s low of 0.6401.