24th July 2020 - Sellers attack 0.7100 as risk-aversion intensifies

Good Morning,

Market Headlines

Rising US jobless claims and simmering trade tensions weighed on global sentiment overnight, US equities also retreating with the Nasdaq reaching a 2 week low. On the Commodities, Brent crude futures dropped 2.1% to $43.35, copper off 0.1%, iron ore up slightly by 0.2% to $110.85, and gold rose 1.4%.


AUD/USD: 0.7091 – 0.7132

AUD/EUR: 0.6113 - 0.6179

EUR/USD: 1.1540 – 1.1627

GBP/USD: 1.2674 – 1.2759

USD/JPY: 106.71 – 107.22

USD/CAD: 1.3352 – 1.3427

NZD/USD: 0.6626 – 0.6690

AUD/JPY: 75.74 – 76.70

AUD/NZD: 1.0690 – 1.0725

AUD Thoughts

  • Sellers attack 0.7100 as risk-aversion intensifies

  • AUD/USD consolidates the latest declines from 0.7138 after snapping the four-day winning streak.

  • Downbeat NAB Business Confidence, federal budget announcements mix with Wall Street’s first red in five days.

  • Escalations in the US-China tension, rising virus numbers and record low US TIPS threaten market sentiment.

Looking forward, the first readings of the Preliminary Merchandise Trade for July will be the immediate catalyst to watch. Forecasts suggest the headline Manufacturing PMI extend recoveries from 51.2 to 53.6 while Services PMI may rise to 53.2 versus 53.1 earlier. It should, however, be noted that the qualitative factors like virus numbers, headlines concerning the US fiscal plan and Sino-American tension will have a higher say in the AUD/USD moves.

Not only a clear break below 0.7100 threshold but tops marked in July 2019 and June 2020, respectively around 0.7085 and 0.7065, become necessary for the bears to re-enter and aim for 0.7000 psychological magnet. On the other hand, an upside clearance of 0.7150 will refill the bull’s bike to ride towards 0.7200 mark.

Event Risk Data Today

AU - Preliminary Merchandise Trade

UK June Retail Sales

Eurozone – July Manufacturing, Services and Composite PMI’s

US – US July Manufacturing, Services and Composite PMI’s

US – June New Home Sales

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