The Australian Dollar held above 0.69 cents, trading to an overnight low at 0.69274 in mild overnight trade. The negative sentiment at the start of trade yesterday due to the alarming rise of new cases in Victoria which resulted in Melbourne’s city-wide lockdown kept the Aussie under pressure. The steady rise of Gold prices, which was already occurring in the background saw the yellow metal rally above the USD1,800 mark, lifting other commodities, including base metals. Copper prices rose 0.71% to hit highs not seen since late January this year. Traders also chose to focus on Australia’s post coronavirus recovery which, compared to that of the US, remains healthy. While that is the case, the cost of this second wave of Covid-19 cases could upset Australia’s economic recovery.
AUDUSD has immediate resistance at 0.7000 cents followed by 0.7030. Immediate support can be found at 0.6960 with 0.6920 as the next support, which is strong. We reported yesterday that the latest Commitment of Traders report saw net speculative AUD short bets to their smallest in two years. The market is no longer short. Look for consolidation today in a likely range of 0.6920-0.7020. Prefer to sell rallies.