AUDUSD eyes June’s top above 0.7000 ahead of RBA minutes, Lowe’s speech
- AUDUSD stays on the front foot above 0.7000 threshold.
- Broad US dollar weakness, hopes of further stimulus and vaccine hopes please the Aussie bulls.
- RBA minutes, Governor Lowe’s speech will in the spotlight.
AUD/USD remains bid around 0.7015 at the start of Tuesday’s Asian session. The aussie pair flashed two-day winning streak by the end of Monday amid upbeat risk sentiment and US dollar’s declines. That said, the bulls are again targeting June month high near 0.7065 in a run-up beyond 0.7000 in a fourth such attempt ahead of the key events at home.
Virus woes get a little audience…
Although the coronavirus (COVID-19) count exceeds 14.00 million and the situation stays worrisome in the US and Australia, market players paid a little heed to the pessimism amid hopes of a virus vaccine and expectations of another round of stimulus from the key global economies. While joining the line of Gilead and Moderna, a vaccine backed by Oxford University and AstraZeneca also increased odds of a cure to the deadly pandemic.
On the other hand, the European policymakers are near to finalizing the details of the much-awaited 750 billion Euros of the stimulus plan. With the allocations of 390 billion to grants, the hardliners seem to have changed the side and are ready to welcome the change. Elsewhere, the US Senate members are also up for discussing another tranche for an aid package. While markets cheer Democrats for their estimated $3.5 trillion funds, the ruling Republicans are sitting tight with nearly $1.0 trillion packages of the proposal.
Against this backdrop, the US 10-year Treasury yields dropped 1.5 basis points (bps) to 0.613% while Wall Street benchmark closed the day on a positive side with Nasdaq adding the highest gains of 2.51%, to 10,767, by the end of Monday’s trading.
Looking forward, minutes of the RBA’s latest monetary policy meeting, followed by Governor Philip Lowe’s speech will be crucial for immediate direction. Though, updates from the on-going European Union (EU) summit and virus headlines, not to forget the Sino-American news, should also be watched carefully as and when arise.
RBA minutes will provide additional signals of the Aussie central bank’s recently bullish bias confronting the pandemic spread in Victoria. Further, the RBA Governor Lowe is to speak on COVID-19: The Labor Market and Public-sector Balance Sheets. Should there be only praise of the employment data and less or no mention of the virus woes, AUD/USD bills will firm their grip towards the June month’s top near 0.7065.
Unless slipping back below an ascending trend line from June 15, currently around 0.6905, sellers are likely to stay away. However, failures to cross June monthly tops or downside break of 0.7000 can pull the quote backward to a 21-day SMA level of 0.6940. Alternatively, highs marked in June 2020 and July 2019, respectively near 0.7065 and 0.7085 can entertain the bulls ahead of 0.7100 round-figures.
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