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  • AUD/USD bounces off intraday low of 0.6964.
  • Markets earlier consolidated the initial reaction to FOMC while US-China tension added weight on the risks.
  • Australia’s Consumer Inflation Expectations slip below 4.2% forecast to 3.3%.
  • Global rating giant Moody’s praises Australia’s fiscal and monetary policies.

AUD/USD recovers the early-day losses while taking a U-turn from 0.6964 to currently around 0.6990. Even so, the Aussie pair prints 0.14% intraday losses by the press time of Thursday’s Asian session. Although the market’s still retracing the Fed-led moves, amid the US-China tension and downbeat Australian data, recent praise from Moody’s could be cited as a reason for the quote’s pullback moves.

Australia’s June month Consumer Inflation Expectations dropped to 3.3% versus 4.2% forecasts. Moody’s says that Australia’s policy responses to the coronavirus outbreak have provided the fiscal stimulus to the economy and improved financial stability in the banking system and particular banks’ funding and liquidity positions. 

Earlier during the day, China’s Global Times played its role to criticize US President Donald Trump by turning down his praise for the Federal Reserve’s easy-money policies. On the other hand, US Vice President Mike Pence took a toll on China while stating to remain tough on the trade deal.

It should be noted that the market’s key risk barometers, namely the US 10-year Treasury yields and Asian stocks, flash negative signs as we write. The US bond yields extend previous fall to 0.726%, down 2.2 basis points, whereas Japan’s Nikkei, Australia’s ASX and most Chinese indices are down by the time of writing.

Considering the lack of major data/events, the pair traders may keep eyes on the risk catalysts ahead of the US session. At that time, US Jobless Claims and Producer Price Index (PPI) might offer additional hints for short-term trading.

Technical analysis

The quote’s ability to keep the bulls happy beyond 200-day SMA suggests further upside above 0.7000 mark.


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