- AUD/USD clings to gains amid the broad US dollar weakness.
- The US overtakes Italy to become the world’s epicenter of the coronavirus.
- Markets in Australia are off due to the Easter Monday Holidays.
- A light economic calendar elsewhere will keep virus updates in the spotlight.
With most markets off due to Easter Monday, including those from Australia, AUD/USD carries Friday’s dull trading to 0.6350 at the start of the week. Even so, the pair remains mildly positive amid the broad US dollar weakness.
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While there are no major positives from Australia so far, the Aussie pair could have taken clues from the widespread outbreak of the coronavirus (COVID-19) into the US. It should also be noted that the Fed’s efforts to pump the markets might have recently failed by Chairman Jerome Powell’s comments on Thursday.
The world’s largest economy is suffering heavily due to the fierce virus outbreak that has taken more than 20,000 lives and infected 530,000 people of the country. With that, the US overtakes Italy and becomes the global hub of the pandemic that has weighed on major economies in 2020.
Citing the fears of the contagion, the US Federal Reserve Chairman Jerome Powell said on Thursday that the US moving with alarming speed toward very high unemployment.
On the other hand, US President Donald Trump recently marked an upbeat statement while saying, “We are winning, and will win, the war on the Invisible Enemy!”
Amid all these catalysts, the market’s risk-tone remains mixed with contrasting plays of equities and the US Treasury yields.
Given the absence of major data/events, traders will keep eyes on the virus updates to determine the near-term trading direction with an upside bias. On the economic calendar, Tuesday’s Chinese trade data could start the flow of key statistical directives that will travel through Thursday’s Aussie jobs report to end the journey on Friday’s China GDP, Retail Sales and Industrial Production data.
Technical analysis
A sustained run-up beyond 21-day SMA enables AUD/USD prices to aim for 0.6390, comprising 50-day SMA, ahead of confronting the yearly resistance line stretched since December 31, currently near 0.6510. On the other hand, the pair’s declines below March-end tops surrounding 0.6215 could recall a 21-day SMA level of 0.6060.
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