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  • A goodish rebound in the US equity futures assisted AUD/USD to regain traction on Thursday.
  • A subdued USD price action remained supportive amid the uncertain US political situation.
  • Dovish RBA expectations, coronavirus jitters might cap gains ahead of the US Q3 GDP report.

The AUD/USD pair edged higher through the Asian session and was last seen trading near the top end of its daily range, around the 0.7065 region.

The pair managed to regain some positive traction on Thursday and recovered a part of the previous day’s sharp intraday slide of around 120 pips from the 0.7155-60 supply zone. A goodish rebound in the US equity futures turned out to be one of the key factors that extended some support to the perceived riskier Australian dollar.

On the other hand, the US dollar was seen consolidating overnight strong gains as investors remain wary of predicting the actual outcome of the US election next week. National polls have been indicating that Democrat rival Joe Biden has a lead over Republican incumbent President Donald Trump, though the gap is narrow in certain key swing states.

Meanwhile, the current uncertainty surrounding the coronavirus pandemic might continue to lend some support to the greenback’s status as the global reserve currency. Investors remain worried that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economic recovery.

Apart from this, increasing bets that the RBA will cut interest rates further in November might hold bulls from placing any aggressive bets. Investors might also prefer to wait on the sidelines ahead of Thursday’s key release of the Advance US Q3 GDP report. This makes it prudent to wait for some strong follow-through buying before positioning for any further gains.

Technical levels to watch