8th July 2020 - Coronavirus woes slow down bulls below 0.7000

Good Morning,

Market Headlines

Overnight, U.S Equity Markets retraced putting an end to the recent five day bull run, the S&P500 down 1.1% while Bond yields were slightly lower. Commodity Markets, Brent oil futures came off 0.7% to $42.80, copper gained 0.5%, iron ore was up 1.8% to $103.20, and gold rose by 0.7%. The bi-monthly GDT dairy auction gained 8.3% with whole milk powder up 14.0% vs market forecast of +5%.


US Dollar Index closed 0.3% up on the day.

EUR ranged from 1.1315 to 1.1259.

USD/JPY traded between 107.50 and 107.80

AUD ranged between 0.6924 and 0.6978.

NZD ranged between 0.6520 and 0.6575.

AUD/NZD ranged between 1.0630 and 1.0608.

AUD Thoughts

- AUD/USD stays depressed after taking a U-turn from monthly top of 0.6998.

- A return to lockdown in Melbourne, over three million cases in the US portray the coronavirus resurgence.

- RBA’s economic worries join US dollar recovery to snap the aussie pair’s six-day winning streak.

- No major data at home or from China highlights virus headlines, risk catalysts as the key.

Yesterday’s bearish signals the markets indecision but the AUD sustained trading above key Simple Moving Average (SMA), the 21-day SMA level around 0.6900 being the nearest support, keeps buyers hopeful. Though, 0.7000 threshold becomes important to watch for fresh long positions.

Event Risk Data Today

US: Consumer Credit May (Market Forecast: -15.0).

FR: June Industrial Sentiment

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