The Australian dollar rose near the psychological 0.70 level through trading on Thursday, hovering lower after its failure to respond the market sentiment’s improvement. After giving up 0.7050, AUD marked its latest intraday lows at 0.7005 despite a rebound in risks assets such as equities.
With a little note on domestic docket, the AUD took a sell-off by association because the market looks to lose commodity correlated assets and growth in the middle of a sharp euro correction.
With little of note on the domestic docket, the AUD suffered a sell off by association, as markets looked to shed growth and commodity correlated assets amid a sharp correction in the euro. There is some factors affect currency market.
They are the promise from the ECB to give additional monetary policy and extended and limited lockdowns across the continent. Because of an expectations for an adjustment of an RBA policy, this week, the AUD rose beyond 0.7150.
The King Dollar Maintains Control
The US dollar strengthened on Thursday through trading, supported by the euro’s sharp downward correction amid a second close that it feared will limit economic recovery, as the ECB pursues easing in an effort to avert worsening recession.
The US dollar index, boosted by a weaker euro, hit a four-week high, rising half a percent to 93.94. The common currency decline through 1.17 and 1.1750, hitting intraday low at 1.1650 because the investors look to drops the single unit ahead of lower ECB rates.
Comments from price action and policy makers across the interest markets suggest additional and further easing rate cuts are imminent, reducing the appeal of the euro. As the continent faces a violent second wave of coronavirus infections, European hopes of recovering faster than the US have faded.
With investors turning to election next week, some definitive action of the price can beseen into the last half next week as after navigating the critical risk events, investors are jumping back.
Demand risk weighed down on the effects of COVID-19 ahead of US election next week. While for now seemingly well supported above 0.70, bets ahead of next week’s risk events have been ruled out by investors.
The Technical Analysis
AUD/USD fades its rebound from 15-week lows, crossed earlier in the day, as it retreated on Friday’s Asian open from 0.7042 to 0.7030. The pair fell below its September low on Thursday as the DXY (US Dollar Index) updated its monthly peak while supporting US GDP data, Jobless Claims.
Also supporting the USD are concerns over the (coronavirus) COVID-19 and gloomy comments from Christine Lagarde, the ECB president, don’t forget about the moods ahead of the US preseidential election. The economic calendar today will be adorned by Private Sector Credit for the September.
And also, by the PPI (Producer Price Index data) for Q3. While there is an expectation for the Private Sector Credit to increase from 0.0% to 0.2% MOM, PPI may also recover on a QoQ basis from -1.2% previous reading to -0.7%.
In the US’s cases, the Core Personal Consumption Expenditure will be accompanied with the Michigan Consumer Sentiment and the October Chicago Purchasing Manager’s index, September’s price index. Apart from the data, the risk story above is also important to note for AUD/USD traders.
Among them, the US election and the virus received great attention. Although September fell below the lowest level, to be able to test the lowest point since July 2020, AUD/USD hasn’t broken the 0.7000 psychological magnet before the EMA level is targeted for 200 days around 0.6950.
It cannot be ruled out in case of a corrective recovery toward the 50-day EMA level of 0.7135 if the upside barrier is successfully cleared by the immediate quotes at 0.7065, comprising the EMA 100 day
