Australian Dollar Watches Chinese Manufacturing Data & FAANG Earnings

FAANG EARNINGS, CORONAVIRUS, AUD/USD, AUSTRALIAN DOLLAR – KEY POINTS

  • AUD/USD hovering at key resistance can precede the plunging over
  • FAANG earnings nudged stocks higher, reinforces the bullish technology rally
  • QoG united states GDP data prompted the worst annualized contraction
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The S&P 500 index and Dow Jones closed 0.38% and 0.85% lower, respectively, as the tech-savvy Nasdaq benchmark ended the day at +0.43% yesterday. Stocks were hard hit after the advanced US GDP data for the second quarter showed the 32.9% contraction, which is the fastest, recorded on the annualized, Q-Q basis. However, the figure wasn’t as affected as it was the case with -34.5%.

Personal consumption also took a hit at about -34.6%, even though this wasn’t as hard hit as the analysts had predicted with estimations of -34.5%. On the other hand, tech giants like Google, Amazon, Apple, and Facebook. Which are also part of the FAANG group, release much better earnings and nudged the market cap for these organizations over $5 trillion. Read on to learn more about Dow Jones, Nasdaq 100 Forecast – Stocks Survive Federal Reserve, What About Earnings?

The COVID-19 crisis, while quite devastating to the global economy, has for quite a while becoming a tailwind for these entities. Their scale economies allowed these companies to perform better than their small, high-cost counterparts. Moreover, the work from home guidelines has placed more emphasis and increase demand for the government enforced lockdown restrictions and digital services. This might help to explain the technology industry’s impressive rally.

Foreign exchange markets largely reflected the risk-on tilt with the New Zealand and Australian dollars closing in the dollar at the expense of this haven-associated US Dollar. On the other hand, the petroleum associated Canadian dollar along with the Norwegian krone also dragged lower in what seems to have a profound decrease in the prices of oil shifted to the assets that were affected by the cycle-sensitive commodity.

Fridays Asia Pacific Trading Session

The Australian dollar, which is highly sensitive to the Chinese economy, might extend the rally if services and manufacturing PMI from Beijing show an improved print. At the moment, analysts are also expecting prints of 50.8% and 54.5% respectively over the immediate 50 thresholds, which distinguishes the expansionary, or contraction outlook among other purchasing managers. Also, the jubilance from the FAANG earnings might leave the market spirits and boost the Australian dollar gains.

AUD/USD Analysis

The AUD/USD seems to be showing increased hesitation with its trading on the proverbial blade edge at the low tier ranging between 0.7206 and 0.7181 key resistance. However, the short-bodied aspect of this candle shows the underlying lack of strength to clear the upper crest. As a result, if investors hold onto the belief that in the near term, there would be no room to rise, but lots of space to crumble, this type of sentiment might cast a bearish perspective on the AUD/USD.

AUD/USD  Chart

AUD USD

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