- AUD / USD is between 0.7190 and 0.7198 after Tuesday’s rise.
- The optimism of the US-China trade deals has helped the markets overcome the challenges of the US push for the virus treatment / vaccine.
- Stocks remain prominent, 10-year US Treasury yields hit a week-high.
- Australia’s Construction Work Done decorates today’s schedule.
AUD / USD is flirting with 0.7200 this early Wednesday morning in Asia. The pair weathered a two-day losing streak the day before while bouncing off a short-term support line. However, the following moves were quite choppy in a 10 pip trading range at the end of the day. The lack of activity on the buyer’s side, initially aided by risky news, could be traced from mostly dead newsfeeds and a lack of late major data / events.
Risk catalysts remain the key …
While Dr. Anthony Fauci’s doubt over the Trump administration’s pressure for a vaccine / treatment questioned the pair’s initial rise in power, news that the US and China had had “constructive” discussions on the phase one trade deal then boosted market sentiment.
The optimistic mood helped the S&P 500 and the Nasdaq post Tuesday’s closing record, while 10-year US Treasury yields gained 4.2 basis points to 0.688% at the end of the North session. American Tuesday.
While the positive news has helped the quote overcome the previous two-day declines and challenge 0.7200, its added advantage persists in a lack of a major push and mixed US data. New home sales in the United States hit their highest level since December 2006, while consumer confidence slumped to its lowest level in six years.
Passing by, pair traders are waiting for Australia’s second quarter (Q2) construction work to be completed, expected -5.8% vs. -1.0% previously. Westpac takes a bearish view of data taking into account the side effects of the coronavirus (COVID-19), as the bank says: “Westpac and the market expect second-quarter construction to show widespread weakness in the market. private sector, forecasting decreases of 3.4% and -7.0% respectively after -1.0% in Q1. “
Therefore, the AUD / USD pair could reduce its latest losses if the data is disappointing. However, risk catalysts can keep the rating positive unless a major negative surprise arises. It should also be noted that orders for durable goods in the United States, forecast at 4.3% against 7.6% revised previously, will be the key to watch in the US session.
The pair’s sustained rebound from the monthly support line, currently around 0.7150, allows bulls to aim for the 07 Aug high near 0.7240. However, a clean break beyond 0.7200 becomes necessary. Meanwhile, a downside breakout of 0.7150 may attack 0.7100 and the monthly low of 0.7075 but the area of 0.7065 / 60 including the June high and the low of the July 24, will limit the further drop in the listing.