- AUD/USD prints three-day winning streak after Wednesday’s bounce off 0.7095.
- Trump’s ability to push Democrats towards his stimulus terms boost market sentiment.
- ECB, RBNZ and BOJ also consider praising monetary policy easing.
- 21-day SMA, three-week-old resistance line probe bulls below 0.7200.
AUD/USD takes bids near 0.7170 at the start of Friday’s Asian session. In doing so, the aussie pair attacks Thursday’s top of 0.7170 amid risk-on markets. The underlying catalysts could be traced to US President Donald Trump’s tactics and the global central bankers’ signals for further easy money policies.
More money ahead on Trump’s conditions…
Having offered piecemeal stimulus offers and showing readiness to restart aid package talks with Democrats, if they respect the Republican stand, Trump tweeted that the “aid talks are starting to work out.” Although House Speaker Nancy Pelosi is against the standalone airline pay, investors think the Republicans will be able to offer the much-needed money supply to the markets very soon.
Other than the US government, the recent signals from the central bankers of the ECB, BOJ and the RBNZ also showed readiness to combat the coronavirus (COVID-19) with monetary easing.
With the increasing expectations of further money, traders turn towards the riskier assets and propel Wall Street benchmarks further. Though, the US 10-year Treasury yields remain sluggish around 0.77% by the end of Thursday’s North American session. It’s worth mentioning that the rush to risk safety weigh on the US dollar’s safe-haven demand and offer another boost to the risk-barometers like AUD/USD.
Other than the stimulus hopes, the US dollar also bears the burden of political uncertainty in America. After a flop show of the US Vice Presidential Debate, global polls boost support for the Democratic victory in the November month’s Presidential Election. However, US President Trump has managed to play havoc, recently with his stimulus tactic, which in turn dim traders’ trust in the greenback. Also portraying the Republican leaders’ disappointment is the latest quitting of a virtual during the Fox interview.
Elsewhere the vaccine hopes are gaining momentum with the recent updates from Gilead showing upbeat signs. The cure is much needed with worsening conditions in the UK and Europe.
Looking forward, some of the second-tier Aussie data may entertain AUD/USD traders ahead of China’s Caixin Services PMI, expected 50.7 versus 54.0 prior.
Technical analysis
50-day SMA, at 0.7205 now, followed by a descending trend line from September 01, currently around 0.7245, also probe bulls even if they manage to conquer the immediate resistance join below the 0.7200 threshold. Meanwhile, 10-day SMA near 0.7130 offers immediate support ahead of the weekly bottom surrounding 0.7095.
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