- A positive mood in the equity markets extended some support to the aussie.
- Upbeat Australian retail sales data remained supportive of the positive move.
- Fresh coronavirus jitters, geopolitical tensions might cap any strong gains.
The AUD/USD pair edged higher during the Asian session, albeit lacked any strong follow-through and remained confined in the previous day’s trading range.
A goodish recovery in the global equity markets undermined the US dollar’s safe-haven demand and drove flows towards perceived riskier currencies, including the aussie. The uptick was further supported by a strong recovery in the consumer spending data from Australia.
According to the preliminary data released this Friday, Australia’s monthly retail sales recorded a strong growth of 16.3% during the reported month and reversed a major part of the previous month’s sharp decline of 17.7%.
The AUD/USD pair has now reversed the previous day’s modest losses and was last seen trading near session tops, around the 0.6870-75 region. Meanwhile, the upside is likely to remain limited amid renewed coronavirus jitters and geopolitical tensions in Asia.
Investors remain concerned about a surge in new coronavirus cases, which now seemed to have largely overshadowed, rather dampened prospects for a sharp V-shaped economic recovery. This, in turn, warrants some caution before placing any aggressive bullish bets.
In the absence of any major market-moving economic releases from the US, the pair remains at the mercy of the broader risk sentiment. Later during the US session, the Fed Chair Jerome Powell’s comments will be looked upon for some trading impetus on the last day of the week.
Technical levels to watch
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