3rd August 2020 - AUD/USD: Coronavirus woes probe bulls near 18-month top above 0.7100

Good Morning,

Market Headlines

Global sentiment was relatively positive with US equities closing of the month in positive territory (S&P500 up 0.8%). Commodities, Brent crude futures gained 0.8% to $43.50, copper dropped 1.6%, iron ore was unchanged at $110.65, and gold rose 1.0%.


EUR retraced lower from 1.1909 (a two-year high) to 1.1762.

USD/JPY bounced off a five-month low of 104.19 to 106.05.

AUD gap-down near 0.7130, keeps Friday’s pullback from 0.7228 (18 month high)

NZD came off a seven-month high of 0.6717 to 0.6623.

AUD/NZD ranged between 1.0750 and 1.0785.

AUD Thoughts

- AUD/USD kick-starts the week with a gap-down near 0.7130, keeps Friday’s pullback from 0.7228.

- Victoria’s “state of disaster” weighs on the quote following a heavy rise in the pandemic cases.

- US Dollar bounced off two-year lows despite no agreement over fiscal stimulus, mixed US data.

Looking forward, month-start activity numbers and TD Securities Inflation for Australia will precede China’s Caixin Manufacturing PMI to offer immediately to the pair traders. However, major attention will be given to the headlines concerning the virus and the US fiscal package agreement. Forecasts suggest China’s private Manufacturing PMI to rise from 51.2 to 51.3. Though, bulls may witness a positive surprise considering upbeat NBS Manufacturing PMI from the dragon nation, which in turn could help the AUD/USD to ignore the recent pullback.

The 10-day exponential moving average (EMA) near 0.7125 offers immediate support ahead of 0.7065/60 rest-zone, comprising the high of June 10 and July 24, to keep the bulls hopeful.

Event Risk Data Today

AU: The AiG PMI index rose by 9.9ppts in June; but the Melbourne lockdown will hit the July reading (prior: 51.5). TD Securities Inflation for Australia jumped post-lockdown but uncertainty remains around if the gains can be sustained (prior: 0.7%). Similarly, ANZ job ads surged 42.0% as the economy reopened, but this upward trend may be reversed on the Vic lockdown.

Asia: Markit manufacturing PMIs (Japan, Korea, India, Malaysia and Taiwan)

CH: The Caixin PMI July (prior and market f/c: 51.2).

EU: The Eurozone July Markit manufacturing PMI

US: Manufacturing activity (July Markit PMI - prior and market f/c: 51.3; July ISM – prior: 52.6, market f/c: 53.6). Construction spending is set to turn positive for the first time since COVID-19 began, rising from -2.1% to 1.0% in June. FOMC's Bullard (02:30AEST), Barkin (03:00AEST) and Evans (04:00AEST) will speak today.

Recent Posts

See All


This material is provided by Navigate Global Payments (Navigate) ACN 615 699 888, AFSL 502711.  The material contains general commentary only and does not constitute investment or any other advice.  Certain types of transactions, like futures, options and high yield securities can be risky, and not suitable for all investors.  This information has been prepared without considering your objectives, financial situation or needs.  Please seek your own independent legal or financial advice before proceeding with any investment decision.  The information is believed to be accurate at the time of compilation and is provided in good faith.  Navigate does not warrant the accuracy or completeness of any information contributed by a third party. The information is subject to change without notice and Navigate is under no obligation to update the information. The information contained in this material are opinions of the author at the time of writing and does not constitute an offer, recommendation to act, a solicitation of an offer, or an inducement to subscribe for, purchase or sell any financial instrument or to enter a legally binding contract.  This information, including any assumptions and conclusions is not intended to be a comprehensive statement of relevant practise or law that is often complex and can change.  Past performance is not a reliable indicator of future performance. Any forecasts given in this material are predictive in character.Navigate Global Payments Pty Ltd nor its related parties or officers accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the information contained or related to this site.