10th August 2020 - AUD/USD: Kick-starts the week with little action under 0.7200, eyes China CPI


Good Morning,

Market Headlines

The Dow and all major stock markets just keep on rallying. The Nonfarm Payrolls were good, not stellar but good and have at least removed some rumours of terrible data from the market. Crude oil prices are falling for second straight day on Friday and the gold rally falters, closes the week below $2050.

Currencies

AUD/USD: 0.7145 – 0.7222

EUR/USD: 1.1756 – 1.1850

GBP/USD: 1.3010 – 1.3130

USD/JPY: 105.55 – 106.05

USD/CAD: 1.3326 – 1.3398

NZD/USD: 0.6590 – 0.6667

AUD/JPY: 75.69 – 76.26

AUD/NZD: 1.0818 – 1.0855

AUD Thoughts

  • AUD/USD attempts consolidation of Friday’s losses from 0.7143.

  • Trump signed four executive orders, including unemployment benefits.

  • American actions of sanctioning Hong Kong Leader and banning Chinese Tech giants TikTok and WeChat add to the US-China tussle.

  • A lack of major data at home precedes the key inflation numbers from China to direct immediate moves.

China’s July month CPI is expected to rise from 2.5% to 2.6% whereas PPI may overcome -3.0% prior to -2.5%. Although the upbeat forecast suggests the pair’s further recovery, any disappointment could be hard to digest. It’s worth mentioning that headlines concerning the coronavirus (COVID-19) and the US-China tension shouldn’t also be missed while trading the pair.

Three failed attempts to stay past-0.7240 joins sluggish MACD on the daily chart to keep the bulls cautious unless the pair crosses the immediate upside hurdle. On the contrary, an ascending trend line from May 22, at 0.7115 now, followed by 0.7105-7100 area comprising 21-day EMA and 0.7100 round-figures, could keep the restricts the AUD/USD prices for a short-term.

Event Risk Data Today

NZ – Business confidence

EU – August Sentix investor confidence

US JOLTS job openings

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