The Australian dollar has reportedly failed to break through or surpass key resistance areas at 0.7340 for the second time this month. However, there is a reversal going on. According to the data, the figure just below 0.7300, and short-term bias remains in the positive range.
The Aussie is again depressed as market sentiment falters lately and it happened globally. AUD is a risk-sensitive currency. Therefore, it has lost its appeal the last Tuesday. Monday's enthusiasm about the successful test of the Moderna COVID-19 vaccine has not been the solution.
It is because the optimism is offset by concerns about the implementation of stricter restrictions. It is known that the number of infections and deaths continues to increase in the US and Europe. Daily cases are still high, so some states have to take lockdown options.
Broad Decline in Equity Markets
The market atmosphere is known to still be in an unstable condition. This situation has led to widespread declines in equity markets right now. Europe's main index has fallen between 0.45% and 0.85%. Meanwhile, on Wall Street, the Dow Jones Index traded 0.45% lower.
The Dow Jones index was reported 0.2% down and the Nasdaq Index was trading practically flat. From a technical point of view, the Aussie actually remains trading in a short-term uptrend while above the trend line from the November 2 low. It is currently around 0.7260.
Previously, it was known that the Australian Dollar currency was at a unified level. There was even a record increase some time ago. One reason is the harmonious relationship between Australia and China. It is also supported by expectations about effective vaccines.
Oil Prices Are Also Reportedly Changing
Oil prices were little changed on Tuesday. It is due to concerns about the lockdown rule to fight a new spike in the case of coronavirus. Such policies can depress short-term demand nowadays; reduce expectations for vaccines, and the possibility of tighter OPEC+ supply policies.
Brent crude futures rose as much as 8 cents to $43.90 a barrel. Elsewhere, U.S. West Texas Intermediate crude closed at 9 cents or 0.2%. It is higher because it is at $41.43 per barrel. On Monday, Brent even showed its highest level in the market.
On Monday, Brent closed at its highest level in 10 weeks after Moderna Inc announced that its coronavirus vaccine was effective at 94.5%. The announcement follows similar news from Pfizer Inc last week. However, clinical trials still have to be carried out so it takes longer.
But the short-term economic outlook remains vague with some European countries tightening their restrictions as cases of the coronavirus increase. To cope with weaker energy demand amid the pandemic, Saudi Arabia called on fellow OPEC+ members to be more flexible with the rules.
Crucial Decision from OPEC+
OPEC+ members are indeed required to be more flexible in responding to the needs of the oil market. It is important to build a case for stricter production policies by 2021. The organization downgraded its oil demand growth outlook for 2021, according to confidential documents seen by Reuters.
One of the policies expected to emerge is to maintain existing cuts of 7.7 million barrels per day (BPH) over the next three to six months. A trusted source said it. The decision was better than reducing the reduction to 5.7 million barrels per day in January.
OPEC+ is widely expected to delay plans to increase production. Pfizer and Moderna's announcement pushed oil prices back above $40. However, there may not be the same support there as happened more than two weeks ago. It is according to Craig Erlam, a senior analyst at OANDA.
