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  • AUD/USD fails to keep the uptick to 0.7169, follows Friday’s downbeat performance.
  • US President Trump’s health is improving but virus updates from New York, France and Ireland are disturbing.
  • News concerning the American stimulus package, Brexit rekindled hopes but nothing clear off-late.
  • Developments on Trump’s health, second-tier Aussie data can entertain momentum traders.

Having begun the trading week up 10-pips to 0.7169, AUD/USD drops to 0.7160 as Monday’s session gains momentum in the Pacific despite regional holidays in Australia. The pair has been pressured since Friday following the news of US President Donald Trump and his wife’s infection to the coronavirus (COVID-19). Although recent updates from America have been positive, virus news from elsewhere challenges the market sentiment. On the contrary, hopes concerning no-deal Brexit are waning while expectations of the US COVID-19 stimulus have been gaining momentum off-late.

President Trump’s health conditions are the key…

News of US President Trump’s COVID-19 infection breaks during the key time when America is only a few weeks away from the presidential election and the aid package is also about to be hammered, per US House leader Mitch McConnell. While the latest developments concerning the Republican leader’s health have been positive, doubts over his health and the US politics loom, which in turn weigh on the market’s risk-tone sentiment.

On the other hand, The Guardian cites leaked government paper to hint on a new three-tier lockdown system is being planned for England whereas New York City’s mayor Bill de Blasio recently said, per Reuters, that he sought partial lockdowns. Further, France also raised the virus-led restriction level to the highest while Ireland is joining the line as well.

It should be noted that the US House Speaker Nancy Pelosi is optimistic about reaching the stimulus deal with Treasury Secretary Steve Mnuchin and is giving a mild hope to combat the risks.

Also on the positive side could be the Brexit headlines that cite one more month of planned divorce talks after the expire of the ninth round of negotiations without any results.

On the data front, Friday’s US employment numbers came in mixed and indicate economic fears, which in turn could be seen in the recent market performance. However, the US 10-year Treasury yields have been up off-late.

Looking forward, traders will keep eyes on the risk catalysts amid a partial closure in Australia and a lack of major data/events from Asia. Despite regional holidays in the Australian Capital Territory, New South Wales, South Australia and Queensland, September month Commonwealth Bank Services PMI and TD Securities Inflation data for Australia can entertain AUD/USD traders. However, major attention will be given to the headlines concerning how US President Trump’s health conditions react to the recently contracted deadly virus.

Technical analysis

While 10-day SMA offers nearby support around 0.7125, a confluence of 21-day and 50-day SMA, near 0.7210 now, becomes the immediate key upside barrier to watch for AUD/USD traders.