Wednesday, November 25

AUD/USD: Off multi-day low to revisit mid-0.7000 area amid market consolidation

  • AUD/USD trims weekly losses while bouncing off the lowest since July 20.
  • Queensland eases border restrictions for NSW but not for Greater Sydney.
  • US dollar index snaps a two-day winning streak to ease from the monthly high.
  • Risk-tone wobbles amid virus woes, fears of delay in the US stimulus.

AUD/USD seesaws around intraday high of 0.7056, currently near 0.7050, while printing 0.30% gains on a day amid the early Friday’s trading. The pair earlier benefited from Australia’s mixed economics as well as the US dollar’s retracement from the monthly high. Though, the latest run-up could be traced from easing activity restrictions at home.

As per the latest coronavirus (COVID-19) update from Annastacia Palaszczuk, Premier of Queensland, quoted by the ABC News, “Queensland will open its borders to travellers from most of New South Wales but continue to ban travellers from Greater Sydney.” Also, concerns that Pacific nations are mostly recovered from wave 2.0 of the virus have helped the AUD/USD prices.

Additionally, the US dollar index (DXY) eases from the highest in a month amid the record daily covid cases in America as well as mounting worries that the US Congress won’t be able to deliver the COVID-19 stimulus soon. As a result, the DXY prints 0.15% intraday losses while snapping a two-day run-up, currently around 93.80.

The market remains gloomy as not only the US but Europe and the UK also flash signs of a wider resurgence of the deadline virus and another round of the national lockdowns. Hence, stocks in Asia-Pacific remain mildly offered whereas S&P 500 Futures drop 0.80% by press time.

Earlier in the day, Australia’s Private Sector Credit weakened below 0.2% forecast to 0.1% in September whereas Producer Price Index (PPI) for the third quarter (Q3) defied -0.7% expectations and -1.2% levels with +0.4% QoQ data.

With the markets looking for clear direction amid a light calendar, risk catalysts and the second-tier data from the US should be watched carefully. Though, risk aversion is likely to keep weighing on the AUD/USD prices.

Technical analysis

An extended recovery towards a 50-day EMA level of 0.7135 can’t be ruled out if the quote manages to clear the immediate upside hurdle of 0.7065, comprising the 100-day EMA. Until then, the 0.7000 psychological magnet and 200-day EMA level around 0.6950 can lure the AUD/USD bears.

Credit: FX Street

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