- AUD/USD keeps the late-Friday range between 0.7160 and 0.7180.
- Virus woes in Australia, US-China trade tussle joins recently downbeat China data to weigh on the Aussie.
- US dollar grinds down as stimulus deadlock, pandemic dominate over welcome economic figures.
- No major data from Australia, the US highlights news/headlines as a market driver.
AUD/USD takes rounds to 0.7175/80 at the start of the week’s trading on Monday. The aussie pair fails to portray any decisive move while staying near the upper-end of the late Friday’s trading range between 0.7160 and 0.7180. Although broad US dollar weakness should have underpinned the quote, coronavirus (COVID-19) worries at home joins risk-negative catalysts to disappoint the buyers.
Disappointments are hard to ignore, but nobody cares…
Be it a steady rise in Australia’s COVID-19 numbers or the latest Sino-American tussle that resulted in the postponement of trade deal review, not to forget dismal figures from China and dovish RBA, there prevail many negative factors that should have taken a toll on the quote. However, nothing of that sort happens as the AUD/USD prices remain mostly unchanged in a 70-pip range under 0.7200 mark. The reason could be traced from the market’s expectations of the pandemic’s cure and the resulted cautious moves.
The US and China postponed their scheduled bi-annual review of the trade deal performance, up for Saturday, without giving any future dates. The reasons cited were asking for more time to check China’s buying of agricultural products and scheduled conflicts.
On the other hand, Australia’s Victoria continues to be a reason for the worries at home. The latest count suggests 279 new cases, with 16 deaths, due to the deadly virus in the second-populous state. This resulted in an extended state of emergency until September 13.
Talking about data, China’s Industrial Production contrasted with the American activity numbers but the US Retail Sales equaled the case on Friday.
Against this backdrop, Gold and equities stayed pressured whereas the US 10-year Treasury yields seesawed around 0.70%.
Looking forward, the economic calendar in Australia is mostly quiet and there are no major releases from the US, except for Empire State Manufacturing Index, expected 16.5 versus 17.2 prior. As a result, traders will have to watch risk catalysts closely in any clear direction.
Technical analysis
While 0.7200 restricts the pair’s immediate upside, a 21-day SMA level of 0.7150 becomes the near-term key support to watch.
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