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Australian dollar fails to hold above 64c

AUD - Australian Dollar

The Australian Dollar traded within a 60-pip range on Friday and with a risk-off end to the week the AUD/USD closed just under 64c. During the Asian session the pair did initially pull back touching a low of 0.6337 following on from a report that a U.S pharmaceutical company that had a prospect COVID-19 treatment drug had flopped during clinical trials. However, the Australian Dollar has showed signs of resilience over the past 3 weeks now and managed to move towards the 64c handle on the back of weak economic data from the U.S, the pair finally closed the week at 0.6394. At the moment it is very much a risk-on / risk-off sentiment amongst the markets and the Australian Dollar’s sensitivity to negative risk conditions will always be at the forefront in the current environment.

On the data front, there are no scheduled releases today but markets will be eagerly awaiting Wednesday’s key inflation data for the first quarter where prices are expected to rise. The AUD/USD opens this morning at 0.6388, with no local scheduled releases moves will be again driven by offshore news and events. We can expect to see initial support at 0.6250 and 0.6225 on the downside. Resistance sits at 0.6400 followed by 0.6430/0.6440.

Key Movers

The US Dollar Index closed the week just over the 100.00 mark as President Trump on Friday signed a $484 billion relief bill that replenishes money for small-business loans to prevent layoffs. The bill also has $75 billion for hospitals and $25 billion for COVID-19 testing. In the UK, Retails Sales recorded their largest fall on record in March as consumers were forced to restrict their shopping trips under the government lockdown. Numbers fell 5.1% despite panic buying boosting food stores by 10%.

Over in the U.S Durable Goods plunged 14.4% in March largely because of a decline for demand for big-ticket items like new cars and trucks as the virus swept through the U.S. The decline was the worst the government has ever recorded. The spread of the disease is forcing people to stay home and worry about their jobs, foregoing purchases of expensive goods. Interestingly, if you strip out the cares and planes component, orders only fell 0.2%.

Expected Ranges

AUD/USD: 0.6220 - 0.6440 ▲

AUD/EUR: 0.5820 - 0.6000 ▲

GBP/AUD: 1.9210 - 1.9580 ▼

AUD/NZD: 1.0570 - 1.0680 ▲

AUD/CAD: 0.8940 - 0.9050 ▲