Daily Market Recap - AUDUSD

The AUDUSD is edging higher for the day as the US Dollar remains on the defensive during mid-week trading. Higher yielding or riskier currencies such as the Australian Dollar are on the rise following news of progress in a coronavirus vaccine and encouraging US inflation data.

The greenback is extending its losses on Wednesday with the Dollar index (DXY) trading down 0.26 percent at the time of writing. The announcement of a higher than expected 0.6 percent rise in the June month-over-month Consumer Price Index is easing worries over deflationary pressures caused by the current economic downturn.

Investor risk appetite over the Australian Dollar is likely rising in part due to the promising signs from an early stage experimental vaccine for COVID-19 developed by Moderna Inc where test results showed it was safe and triggered some response from the healthy volunteer test groups.

However, looking at the Australian economic data docket, the Westpac July consumer confidence report released today showed a strong drop in consumer sentiment, reversing the previous months gains and limiting upside potential in the AUDUSD.

From a technical perspective, the pair has met significant resistance at the troublesome 0.70439 marks, with traders appearing to reject prices above the 0.70 level. The AUDUSD will need to close above 0.7001 in order to draw buyers back in to test the yearly high of 0.70643.

(Chart Source: Tradingview 15.07.2020)

On the flip side should the AUDUSD fall below the 0.786 Fibonacci retracement level at 0.69748, the door may be open for sellers to push for a test of the weekly low of 0.69212 in the following sessions.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.