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Aussie dollar range bound amid growing COVID19 concerns

AUD - Australian Dollar

The Australian Dollar is fractionally lower this morning against the US Dollar trading around 0.6950. The advance of the local currency seems to be stalling just ahead of a key resistance levels against the Greenback having failed to extend the weeks early uptick and push through 0.70 US cents last week. We anticipate the AUD will remain range bound through the short-term, bouncing between support and resistance handles as the ebb and flow of risk demands follows the shifting COVID-19 led narrative. The COVID-19 outbreak in Melbourne and the subsequent six-week lockdown imposed on the city will continue to be closely watched this week with Melbourne being a key economic hub for Australia and there will certainly be a hit to economic growth.

Looking ahead this week on the data front and on Tuesday we will see the release of the NAB Business Confidence followed by Westpac Consumer Sentiment on Wednesday. On Thursday all eyes will be on the employment release which is forecast to jump from 7.1% to 7.2%. From a technical perspective, the AUD/USD pair is currently trading at 0.6956. We continue to expect support to hold on moves approaching 0.6923 while now any upward push will likely meet resistance around 0.6992.

Key Movers

The dollar slipped on Friday on hopes of a potential vaccine for the coronavirus that outweighed concerns about the surge in infections in the United States and around the world. The main market-moving news on Friday was Gilead’s report on its phase three clinical trials of Remdesivir. Gilead said that the drug cut the death rate of those in its trials by 62%. Over the weekend it was reported the state of Florida set a new record with over 15,000 new COVID-19 cases. Coronavirus infections are rising in about 40 states. Over the last week the United States has broken global records by registering approximately 60,000 new cases a day for the last four days in a row. On the release front on Friday U.S. producer prices unexpectedly fell 0.2% in June, following a 0.4% rebound in May, as the economy battles depressed demand amid the COVID-19 pandemic.

Expected Ranges

AUD/USD: 0.6800 - 0.7000 ▼

AUD/EUR: 0.6120 - 0.6180 ▲

GBP/AUD: 1.7980 - 1.8220 ▲

AUD/NZD: 1.0550 - 1.0680 ▼

AUD/CAD: 0.9410 - 0.9480 ▲