- AUD/USD caught some strong bids on the back of upbeat domestic retail sales figures.
- Improving risk sentiment, a modest USD pullback remained supportive of the move up.
- Concerns over the economic fallout from the coronavirus might cap any strong gains.
The AUD/USD pair traded with a positive bias through the Asian session and is currently placed near the top end of its daily trading range, just below mid-0.6300s.
The Australian dollar caught some aggressive bids on Wednesday in reaction to stellar Aussie monthly retail sales figures and assisted the pair to recover the previous day’s negative move to near two-week lows.
The preliminary report showed that sales grew a whopping 8.2% MoM in March, which coupled with a positive sentiment around the equity markets provided a goodish lift to riskier currencies, like the aussie.
The risk-on mood was supported by the US President Donald Trump’s comments that 20 states have shown readiness to re-open and the passage of $484 billion economic stimulus package by the US Senate.
Meanwhile, improving global risk sentiment undermined the US dollar’s safe-haven status. This remained supportive of the pair’s intraday positive move for the first time in the last three trading sessions.
It, however, remains to be seen if the pair is able to capitalize on the positive move or runs into some fresh supply at higher levels amid persistent worries over the economic fallout from the coronavirus pandemic.
This coupled with RBA Governor Philip Lowe’s comments on Tuesday, saying that the country is likely to experience its biggest contraction in output since the 1930s, should keep a lid on any runaway rally for the major.
Technical levels to watch
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