USD Might Retrace Back vs. AUD as Demand Increases

Covid-19, AUD/USD, US Dollar, Australian Dollar – Key Points

  • AUD/USD refused at multi-month key resistance – what will happen after this?
  • Covid-19 medical statistics in Florida continue showing an alarming trend
  • Japanese Yen and US Dollar gain after the wall street stock market retreats.
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The Wall Street stocks ended a day on a bad note with the Nasdaq 100, S&P 500, and Dow Jones indices closing 0.73, 0.34, and 0.50% respectively. On the other hand, the tech-leaning stocks have ultimately hit the hardest that helps describe the fact why this Nasdaq index was quite deep in the current red relative to the benchmark peers. Moreover, with the S&P 500 information technology resulted in losses by industry, particularly under services and software.

A few of the organizations with the most significant losses in this subcomponent include huge tech giants such as Oracle (ORCL) and Microsoft (MSFT). About the foreign exchange markets, the USD regained some of its previous gains at the hands of the New Zealand and Australian dollars. The risk-sensitive Swiss Franc and Japanese Yen also largely benefited from the risk-off environment, which puts the premium on current liquidity as opposed to the returns.

The real risk aversion source has not been clear, but it is not likely that it is just a single catalyst. The mixed United States employment and sales data never seemed to shift the dynamics of the market substantially. The markets started getting rattled at the same time, reports about the increasing medical metrics about coronavirus infections and deaths that were released in Florida.

Before the immediate decline, the EUR/USD rose after the European central bank interest rate final decision. The financial agencies made sure that the bond-purchasing program remained unchanged at 1.35 trillion euros by the increased income losses and uncertainty loses based on spending. They further warned that the economic recovery would be even across industries and risks remained tilted to the downside. This has been further restated by The Austrailian Dollar’s Position Against the US Dollar is High Because of The Successful Retail Sales Results.

That said, the European central bank further stated that it was ready to change its resources as required and will do all that is necessary for its mandate. The officials also stressed the increased need for undertaking ambitious and targeted fiscal measures. Christine Lagarde, who is the president of the ECB, stated that she presumes the Eurozone recovery fund, in an important meeting that will happen by the end of this week would be approved.

Friday Asia Pacific Trade Session

The relative space data space would most likely direct the attention of traders to basic themes such as COVID-19. Chia-Australia and US-China geopolitical tensions have been typically brushed off. Incase the wall street trade is a great sign of what is yet to come, the JPY and USD might get the tailwind as the NZD and AUD might continue being defensive alongside the cycle sensitive products such as crude oil.

AUD/USD Technical Outlook

The AUD/USD again refused at key resistance at the 0.7 level. This further restated the fact that investors don’t feel the rate over this range, considering the current circumstances is justifiable.

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