- AUD bulls benefiting from incessant purchases of gold and petroleum.
- Improved risk tone in a context of easing of blockages underpins overall.
- The US dollar remains undermined by Powell’s warnings.
New offers emerged near 0.6425 in European trade, allowing AUD / USD sires to retry the 0.6450 barrier.
The main catalyst behind the resumption of the upside in the resource sector, the Aussie, is seen as the further rise in gold and oil prices. Gold has refreshed 7.5-year highs above $ 1,760, while WTI oil has risen to 31 after European traders hit their desks and take signals from their Asian peers.
The yellow metal continues to draw offers from tensions between the United States and China over the management of the coronavirus, the gloomy global economy and the increased expectations of monetary policy stimulus. Recall that Australia will probably overtake China as the world’s leading producer of gold next year.
Meanwhile, easing worldwide lockdown restrictions raises hopes for an earlier economic recovery and, in turn, stimulates demand for high-yielding assets such as the Australian dollar, oil, actions, etc.
In the midst of the optimistic market atmosphere and the warnings of the Federal Reserve Chairman (Fed) J. Powell regarding the American economic warning, the American dollar remains largely weakened and helps to push the trend north. The US dollar index snakes near a daily low of 100.28, down 0.10% so far.
The Australian ignored the optimistic results of the employment survey conducted by the Australian Bureau of Statistics (ABS), because the feeling of risk and the action on the price of gold remain the main drivers of the market. Attention is now drawn to the minutes of the Reserve Bank of Australia (RBA) monetary policy meeting to be released on Tuesday. The US macro calendar remains almost empty of data on Monday.
AUD / USD technical levels to watch
At press time, the AUD / USD added 0.41% to trade at 0.6441, with the bullish attempt likely to face immediate resistance at 0.6458 (10-DMA). A break above the latter would open the doors around 0.6475 (May 15 high). On the downside, the support of 0.6400 remains critical before the bear falls the lowest of May 7 at 0.6377.