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The 0.7200 area is proving a difficult resistance for the aussie. There is plenty of risk of further equity turbulence on US political headlines, keeping the AUD/USD pair capped at 0.7250 and with scope for a test of the 100-Day Moving Average (DMA) at 0.7064, as per Westpac.

Key quotes

“Australia’s official 2020/21 budget was well flagged as usual, with the delivery of the details not inspiring a noticeable A$ response. This financial year is set to produce a record-smashing deficit. 

“H2 is likely to produce reasonable growth even if Victoria’s restrictions remain harsh and as tensions between New South Wales and Queensland deepen over the latter’s ongoing border closure.”

“AUD/USD continues to follow the swings in US equities, which in turn keeps political news prominent. While we are seeing increasing predictions of equities being supported by a Democratic ‘Blue Wave’, memories of the 2016 whipsaw should keep markets on edge.”

“We switch from up to neutral on the week, with rallies capped around 0.7230/50 and scope for a test of the 100-DMA at 0.7064.”