28th July 2020 - Bulls keep 0.7200 on radar as US dollar weakness continues


Good Morning,

Market Headlines

Global Sentiment was remained neutral overnight, amid looming uncertainty over the fiscal package, rising virus cases. US equity markets edged higher overnight with the NASDAQ gaining 1.6% and the S&P up +0.8%. On the Commodities front, Brent crude futures rose 0.4% to $43.50, copper gained 0.2%, iron ore fell 2.0% to $107.00, and gold rose 1.8%.

Currencies

AUD/USD: 0.7120 – 0.7150

AUD/EUR: 0.6081 - 0.6101

EUR/USD: 1.1682 – 1.1781

GBP/USD: 1.2808 – 1.2904

USD/JPY: 105.12 – 105.60

USD/CAD: 1.3354 – 1.3405

NZD/USD: 0.6659 – 0.6692

AUD/JPY: 74.97 – 75.33

AUD/NZD: 1.0675 – 1.0701

AUD Thoughts

- AUD/USD stays on the front foot near the mid-0.7100 area

- US Dollar extends weakness to two-year low amid looming uncertainty over the fiscal package, rising virus cases.

- Wall Street flashed mild gains, Gold surged to record high.

- RBA’s Kent showed readiness to buy bonds to maintain a 0.25% yield target.

Looking forward, a light calendar pushes the pair to stretch the previous bullish bias. However, the buyers seem to step back off-late and may allow the bears’ entry in a case of any USD-positive news. It’s worth mentioning that the RBA’s Assistant Governor Christopher Kent cited odds of further bond purchasing to maintain the 0.25% yield target, which in turn may offer a pullback to the AUD/USD prices.

While 0.7200 becomes the immediate upside target, 0.7210 becomes the validation point for the quote’s run-up towards February 2019 top surrounding 0.7300. Alternatively, Friday’s bottom and June month’s top together offer 0.7065/60 as the key support.

Event Risk Data Today

AUWeekly Payrolls and Jobs (prior: 0.33%, market f/c: 0.3%)

USJuly Consumer Confidence (prior: 0, market f/c: 5)

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