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  • AUD/USD snapped five-month run-up in September despite consolidation from 0.7004 during the last few days.
  • Vaccine hopes, expectations of US stimulus favored market’s risk-on before witnessing disappointment in the last hour.
  • US presidential debate failed to offer any major clues, China PMIs and US ADP flashed welcome numbers.
  • Beijing is off for the golden week, Aussie PMIs and risk catalysts should be carefully watched.

Having closed a month with a three-day winning streak, by rising to more than one week high, AUD/USD picks up bids near 0.7165 at the start of Thursday’s Asian session. In doing so, the aussie pair keeps the recent trading range between 0.7150 and 0.7176 amid a shift in the risk-tone sentiment.

Risk is the key…

Although global traders got nothing but the disappointment from the first round of the US presidential election debate on Wednesday, upbeat data and hopes of American aid package kept the market mood positive.

China’s September month Manufacturing PMI, be it official or from Caixin, preceded the US ADP Employment Change to register positive calendar outcomes.

On the other hand, American Congress tries hard to agree on the coronavirus (COVID-19) aid package with Republicans up for $1.5-$1.6 trillion versus Democratic demand of $2.2 trillion. While the immediate negotiations have failed, the policymakers pushed back the final voting on the stopgap funding, giving indirect hints of one more day for the politicians to agree on the much-awaited stimulus.

Elsewhere, the COVID-19 is causing serious problems in the UK and Europe but positive comments from Regeneron Pharmaceuticals and Moderna fuels the hopes of the cure to the pandemic.

Against this backdrop, the Wall Street benchmark managed to close on the positive side, despite stepping back during the last hour, whereas the US 10-year Treasury yields gained over four basis points (bps) to 0.686% at the end of Wednesday’s North American session.

Looking forward, China’s absence for one full week can restrict the market moves in Asia. Though, Australia’s AiG Performance Mfg Index and Commonwealth Bank Manufacturing PMI can offer intermediate moves. It should, however, be noted that the risk catalysts are the key to watch.

Technical analysis

Despite surging to highest in more than a week, AUD/USD is yet to clear the September 09 low of 0.7191, needless to mention about 50-day SMA level near 0.7205, which in turn probe the pair buyers. Though, sellers may await a downside break of 10-day SMA, currently around 0.7135, for fresh entries.