After a tranquil start to the week, the AUD/USD is looking for a clear direction near the yearly low.
In Australia, covid fears are at an all-time high, with the highest levels since early September.
As viral outbreaks threaten protracted local lockdowns, Australian authorities are preparing additional stimulus.
The important events will include Prime Minister Morrison’s address, China’s June trade numbers, and the US CPI.
During early Tuesday morning in Asia, the AUD/USD seesaws around 0.7480, following a tranquil week-start around the yearly low. Amidst the coronavirus (COVID-19) at home and a lack of key catalysts, the pair fails to welcome fresh record highs in stocks, which highlights today’s China trade statistics and US Consumer Price Index (CPI) for fresh momentum.
Australia’s covid-led activity limitations are set to be stretched, with the largest number of new confirmed cases in over ten months, around 120, according to ABC News. Conditions in New South Wales (NSW) have deteriorated, prompting Prime Minister Scott Morrison, NSW Premier Gladys Berejiklian, and senior authorities to debate an aid plan over the weekend.
Even though virus instances have increased recently, the US is carefully lifting virus-related activity limitations, while UK officials confirm July 19 unlock.
“The US economy has not accomplished the’substantial additional progress’ set by the US Federal Reserve to begin reducing asset purchases,” New York Federal Reserve President John Williams said, according to Reuters. His remarks bolster expectations for more loose money and favorable equities.
In this environment, earnings euphoria pushed US equity benchmarks to new highs, while US Treasury yields rose 1.2 basis points (bps) towards the end of Monday’s North American session.
Moving on, the important statistics in Asia will be the National Australia Bank’s (NAB) Business Confidence and Business Conditions figures for June, as well as China’s Trade Balance, Imports and Exports for the same month, followed by the US CPI for the previous month. While the NAB data may be mixed, the predicted deterioration in Chinese trade numbers, combined with the COVID-19) issues, might keep the AUD/USD values under pressure. The expected announcement of fiscal stimulus in NSW, though, could provide an intermediate boost to the pair.
Despite recovering off August-September high late last week, at 0.7415, the AUD/USD remains below a 12-day-old resistance line near 0.7505. The MACD line, on the other hand, teases short-term bulls, thus an upside clearance of 0.7505 might precipitate a corrective downturn towards the 200-DMA level of 0.7581./n
