- A modest USD pullback assisted AUD/USD to reverse an early dip to the 0.6335 region.
- The USD bulls failed to gain any respite from Friday’s mixed US durable goods orders.
- Concerns over coronavirus crisis seemed to have capped the upside for the major.
A mildly softer tone surrounding the USD assisted the AUD/USD pair to hold steady near the top end of its daily trading range, around the 0.6380 region.
The pair showed some resilience below 200-hour SMA, rather attracted some dip-buying near the 0.6340-35 region and moved into the positive territory for the third consecutive session on Friday amid a modest US dollar pullback from 2-1/2-week tops
Despite doubts over the efficacy of Gilead Sciences’ antiviral drug remdesivir in treating the COVID-19, the optimism over an additional $484 billion US economic stimulus package boosted investors’ confidence and underpinned the global risk sentiment.
The risk-on mood was evident from a positive mood around equity markets and further supported by some strong follow-through recovery in crude oil prices. This dented the USD’s safe-haven status and lifted perceived riskier currencies, including the aussie.
The greenback was further pressured by sliding US Treasury bond yields and failed to gain any respite from Friday’s mixed US Durable Goods Orders data for March, albeit the downside remained limited amid concerns over the economic fallout from the coronavirus pandemic.
This coupled with market expectations that the global economy will remain week, even after the lockdowns are eased, further extended some support to the USD’s status as the global reserve currency and kept a lid on any additional gains for the major, at least for now.
Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the overnight swing high, around the 0.6405 region, before traders start positioning for any further near-term appreciating move.
Technical levels to watch
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