- AUD/USD dropped from the monthly top on Wednesday, pressured by the press time.
- Risk aversion triggered the US dollar’s broad recovery.
- Virus/economic data, market performance and IMF could be cited as main catalysts.
- Aussie employment data will be in focus, for now, US statistics, pandemic updates will also be the key.
Having turned south from the month’s high the previous day, AUD/USD remains under pressure around 0.6315 at the start of the Asian session on Thursday. In doing so, the Aussie pair portrays the US dollar’s broad recovery strength amid fresh risk-off. Though, traders are waiting for the monthly Aussie jobs report for fresh impetus.
Risk-off returns…
Be it the surge in the coronavirus (COVID-19) numbers from the global hotspots or disappointing US data, not to forget the International Monetary Fund’s (IMF) downbeat economic assessment, everything contributed to Wednesday’s risk aversion.
The COVID-19 fatalities defied the previous pullback while flashing the six-day high infections in Spain as well as propelling the US death toll beyond 30,000 on Wednesday.
As a result, the IMF signals to add to the already announced more than $8 trillion global aids but US President Donald Trump opposes the moves. The global lender previously cited recession fears in its April month economic forecast.
On the data front, US Retail Sales and NAHB Housing Market Index fell by the records whereas Industrial Production marked the steepest fall since 1946. Also flashing negatives were the Fed’s Beige Book that suggests a sharp increase in the loan demand.
Amid all these catalysts, Wall Street registered losses while the US 10-year Treasury yields dropped 10 basis points (bps) to 0.635% by the end of Wednesday in the US markets.
Moving on, March month employment data will be the key for the Aussie traders, for now. Forecasts suggest an increase in the seasonally adjusted Unemployment Rate to 5.5% from 5.1%, coupled with a drop in Employment Change by -40K versus +26.7K prior. While expectations signal the extension of the current weakness of the pair, recently upbeat data from China might contribute towards less pessimistic figures and could offer pullback of the quote.
Following the Aussie data, traders will keep eyes on the US Jobless Claims and housing market data, not to forget Philadelphia Fed Manufacturing Index, while also watching the pandemic developments for further direction.
Technical analysis
Despite having failed to sustain the 50-day SMA break, the Aussie pair stays above a four-week-old rising support line, currently near 0.6270, which in turn could reinforce the momentum to challenge the 50-day SMA figure of 0.6365. However, buyers may remain skeptical ahead of the pair’s successful rise past the monthly high around 0.6445. Alternatively, the pair’s further downside below 0.6270 will recall the March-end top surrounding 0.6215.
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