- AUD/USD remains on the front foot around five-week high.
- The market sees risk-on amid a lack of major data, pays little heed to the virus-led fatalities.
- US President Trump pushes for the economic restart, IMF slashes global growth.
- Aussie Westpac Consumer Confidence, virus headlines in focus.
AUD/USD remains on the front foot around 0.6440, highest since March 12, at the start of Wednesday’s Asian session. By the end of Tuesday’s trading, the Aussie pair completed seven-day winning streak, mainly benefiting from the US dollar weakness and recovery in the trade sentiment. Though, the coronavirus (COVID-19) fatalities are far from over.
Is it a risk-on?
While there’s no respite in the COVID-19 fatalities and the International Monetary Fund (IMF) has also cut its global growth forecast, to -3.0% in 2020, challenges to the market’s trade sentiment prevails. It should also be noted that the US earning season just kicked off and is yet to show actual colors of the pandemic and hence adds fears to the trading. Additionally, France and India have already extended the lockdowns and the UK is almost about to follow the footsteps, which in turn signal further damages to the global economic cycle and risks.
Even so, upbeat performance indicators from China, the March month trade numbers were the latest, as well as US President Donald Trump’s push for restarting the economic activities sooner than later, triggered risk-on recently. Further to note, Richmond Fed’s Barkin crossed wires off-late while saying that the businesses rethinking operations as a result of the pandemic, from diversification of supply chains to service businesses building more separation among people into their plans.
As portraying the risk-tone, the US 10-year Treasury yields remain positive around 0.76% with Wall Street ending Tuesday in the green.
Aussie traders may now keep eyes on the Westpac Consumer Confidence data for April, prior -3.8%, for immediate direction. However, this doesn’t dim the importance of virus updates as the key catalyst. During the US session, March month Retail Sales and Industrial Production will join hands with the April month NY Empire State Manufacturing Index to gain the market’s attention.
Technical analysis
Having successfully breached 50-day SMA, AUD/USD is on the way to confront a downward sloping trend line since January 01, 2020, currently near 0.6500. However, any declines below 0.6375, comprising 50-day SMA, might not refrain from visiting an ascending trend line since March 19, 2020, around 0.6220 now.
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