AUD/USD bulls take a breather around 0.6600 ahead of RBA’s Lowe

AUD/USD bulls take a breather around 0.6600 ahead of RBA’s Lowe

  • AUD/USD seesaws in a choppy range between 0.6590 and 0.6605 in the last few hours.
  • Australia’s Commonwealth Bank PMIs recently flashed mixed signals.
  • The risk-on sentiment, broad US dollar weakness propelled the quote to refresh 10-week high the previous day.
  • RBA Governor Philip Lowe, updates on the virus, Aussie-China and the US-Sino tension will be the key.

AUD/USD keeps the 0.6590-0.6605 range while taking rounds to 0.6593 amid the early Asian session on Thursday. While the Aussie pair’s latest pullback, within the range, could be traced to the Commonwealth Bank PMIs, broad risk-on sentiment favored the quote to visit March 09 high the previous day.

FOREX SIGNALS

The preliminary readings of the Commonwealth Bank’s May month PMIs flashed mixed readings off-late. The headlines Manufacturing PMI slipped well below 46.5 forecast and 44.1 previous to 42.8 but Services PMI recovered from 19.5 prior readouts to 25.5. As a result, Composite PMI improved from 21.7 to 26.4.

In addition to the mixed activity numbers, Reuters’ report that the global coronavirus (COVID-19) cases crossed five million mark with a surge South American numbers exerts additional downside pressure on the Aussie pair.

Even so, Global Times’ signal of no more Aussie-China tussle is likely restricting the downside off-late. The state-backed media emphasized on the Australian Agricultural Minister’s refrain to call a trade war while suggesting a halt in further punitive measures for the Pacific nation. Though, the news doesn’t step back from warning against any allegation on the virus outbreak.

It’s worth mentioning that the broad US dollar weakness, as well as a run-up in the Wall Street benchmarks, also favored the AUD/USD prices. The greenback seems to have been bearing the burden of the virus outbreak and downbeat data while also ignoring the latest FOMC minutes that defied calls of negative Fed rates. On the other hand, global policymakers’ rush to suggest further easing seemed to help the US stocks.

  EUR/USD Forecast: Trading above 1.1300 amid an upbeat mood

That said the US 10-year Treasury yields stay below 0.70%, recovering in the last hours of the US session, whereas S&P 500 Futures step back from the initial fall while taking rounds to 2,967.

Looking forward, RBA Governor Lowe is scheduled to speak at a web-based panel discussion at 02:30 GMT. The subject of the FINSIA webinar, “The Regulators: Priorities Updated”, signals that the RBA leader might hint for the central bank’s next move during the Q&A session, if not during the panel discussion, which in turn will be the key for the pair traders.

It should, however, be noted that any more updates on the Aussie-China or the US-China tussle, coupled with the virus news, could keep the driver’s seat ahead of the busy US session.

Technical analysis

Sustained trading beyond a 100-day SMA level of 0.6500 keeps the buyers hopeful of the pair’s further upside towards 0.6665, comprising 200-day SMA. However, any more run-up past-0.6665 may have to conquer March month top surrounding 0.6685/90 before meeting 0.6700 mark.

Additional important levels

Overview
Today last price 0.6592
Today Daily Change 55 pips
Today Daily Change % 0.84%
Today daily open 0.6537
 
Trends
Daily SMA20 0.6458
Daily SMA50 0.6271
Daily SMA100 0.6507
Daily SMA200 0.6664
 

Levels
Previous Daily High 0.6585
Previous Daily Low 0.651
Previous Weekly High 0.6562
Previous Weekly Low 0.6401
Previous Monthly High 0.657
Previous Monthly Low 0.598
Daily Fibonacci 38.2% 0.6556
Daily Fibonacci 61.8% 0.6538
Daily Pivot Point S1 0.6503
Daily Pivot Point S2 0.6468
Daily Pivot Point S3 0.6427
Daily Pivot Point R1 0.6578
Daily Pivot Point R2 0.662
Daily Pivot Point R3 0.6654

 

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