- AUD/USD stalls this week’s corrective from YTD top amid a subdued USD demand.
- A strong rebound in the US equity futures undermined the safe-haven greenback.
- Fears of a second wave of virus infections might keep a lid on any strong move up.
The AUD/USD pair reversed an early dip to 1-1/2-week lows and was last seen trading near the top end of its daily trading range, around the 0.6860-65 region.
The pair showed some resilience near the 0.6800 round-figure mark and for now, seems to have stalled this week’s sharp corrective slide from YTD tops. The AUD/USD pair has now recovered around 60-65 pips from the Asian session swing lows and the uptick was sponsored by a subdued US dollar price action.
The greenback was seen consolidating the previous day’s strong positive move amid a goodish rebound in the US equity futures. This, in turn, was seen as one of the key factors lending some support to the perceived riskier Australian dollar and behind the AUD/USD pair’s intraday bounce.
Meanwhile, the upside is likely to remain capped on the back of fading hopes of a sharp V-shaped economic recovery, especially after the Fed’s gloomy outlook. This coupled with fears of a second wave of coronavirus outbreak might hold investors from placing fresh bullish bets.
Hence, it will be interesting to see if the AUD/USD pair is able to capitalize on the move or runs into some fresh supply at higher levels. This makes it prudent to wait for some follow-through buying before traders start positioning for the resumption of the pair’s recent strong bullish trend.
Moving ahead, market participants now look forward to the release of the preliminary June Michigan Consumer Sentiment Index from the US. In the meantime, the broader market risk sentiment might continue to influence the AUD/USD pair’s momentum on the last trading day of the week.
Technical levels to watch
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