7th August 2020 - AUD/USD sits near 1.5 year top above 0.7200 ahead of a busy day.


Market Headlines

Sentiment was moderately upbeat on optimism a US fiscal stimulus package would be agreed this week. The S&P500 is up 0.6% on the day, while the NASDAQ was 1% higher. For commodities, Brent crude oil futures are unchanged at $45.15, copper fell 0.2%, iron ore rose 2.6% to $120.35 – a 12-month high, and gold rose 1.1% to $2070 – a fresh record high.

Currencies

AUD/USD: 0.7175 – 0.7239

EUR/USD: 1.1818 – 1.1893

GBP/USD: 1.3120 – 1.3185

USD/JPY: 105.31 – 105.69

USD/CAD: 1.3266 – 1.3323

NZD/USD: 0.6631 – 0.6675

AUD/JPY: 75.62 – 76.41

AUD/NZD: 1.0809 – 1.0850

AUD Thoughts

- AUD/USD seesaws around the lower end of 0.7225-40 trading range despite quick slip to 0.7213.

- Broad US dollar weakness, optimism surrounding US stimulus keep Aussie bulls strong.

- RBA MPS, China Trade data to offer immediate direction but markets will focus on US NFP tonight

RBA’s MPS is most likely to reiterate its dovish tone with a downward revision to economic forecast and raise challenges for the Aussie pair’s latest upside. Further, China’s trade surplus is also likely to recede from $46.42B to $42B and may add downside pressure on the quote. However, market players are expected to follow the pre-NFP trading lull unless any extreme surprises, which in turn highlights the US Jobs Report as the key.

Additionally, today might be the last day for the US policymakers to agree on the unemployment claims before they head for August vacation, which in turn keeps stimulus headlines in focus.

Sustained break of 0.7200 gives a free hit to attack the year 2019 top surrounding 0.7300. Alternatively, an ascending trend line from May 22 joins 21-day EMA to limit downside around 0.7110-0.7100 during the quote’s declines past-0.7200.

Event Risk Data Today

AU: The RBA updated forecasts August MPS, Assistant Governor Economic Luci Ellis will then speak via an ABE webinar.

CH: July Trade and Foreign Reserve Data & Q2 Current Account Detail.

US – July Nonfarm Payrolls

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