24th August 2020 - Bulls relinquish controls below 0.7200


Good Morning,

Market Headlines

US equity markets ended the week on a positive note with the Dow Jones gaining 0.7%, while the S&P 500 and NASDAQ rose 0.3% and 0.4% respectively. Commodities, Brent crude futures fell 1.2% to $44.35, copper fell 1.9%, iron ore fell 1.9% to $125.95, and gold fell 0.4%.

Currencies

AUD/USD: 0.7139 – 0.7196

EUR/USD: 1.1755 – 1.1872

GBP/USD: 1.3059 – 1.3220

USD/JPY: 105.75 – 106.12

USD/CAD: 1.3170 – 1.3245

NZD/USD: 0.6517 – 0.6545

AUD/JPY: 75.59 – 75.96

AUD/NZD: 1.0949 – 1.1012

AUD Thoughts

- AUD/USD begins the week with a drop to 0.7150.

- US dollar gains dimmed Wall Street’s shine, Treasury yields dropped.

- COVID-19 cases rise in Europe, slow down in Victoria and the US.

- Economic data were mixed at home, upbeat in America, nothing major to watch in Asia

Despite easing from the yearly top, AUD/USD remain beyond 21-day EMA and the monthly support line, respectively around 0.7150 and 0.7140, on a daily closing basis. As a result, the bulls have hopes if the quote manages to cross 0.7250. However, a downside break of 0.7140 might not hesitate to recall 0.7065/60 support area comprising June month’s high and July 24 low.

Event Risk Data Today

AU - The monthly update for June on the household impacts of COVID-19 will be released today.

NZ – Q2 retail sales market expect the sharp drop in spending during the lockdown period to show in Q2 real retail sales (est. 12.0% and 16.3%, respectively, prior -0.7%). PM Ardern will announce a decision on the Auckland region level 3 activity restriction.

US – July Chicago Fed activity index rose to a record high on states reopening in June and the market is optimistic this trend will carry forward in July (prior: 4.11, market f/c: 3.70).

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