AUD/USD – Grinding Higher on Job Support, Virus Case Rise Caps at 0.7050

The Australian Dollar extended its gains against the US Dollar, grinding higher in early Asian trade to 0.7020 from its New York close of 0.7017. The Aussie Battler spent most of its trading under the 0.70 cent resistance level yesterday until risk assets climbed in New York. Traders shrugged off Australia’s latest rise of Covid-19 infections in New South Wales, the country’s largest state. Australian Prime Minister Scott Morrison is set to announce today that job support through the government’s JobKeeper and JobSeeker scheme will be extended, although both payments will be lower than they are currently.

AUDUSD Technical View - FXStreet Chart - 21 July 2020
AUDUSD Technical View – FXStreet Chart – 21 July 2020

Meantime, the Australian Business Insider reported that New South Wales is unlikely to go towards full lockdown, despite rising outbreaks, albeit small, in a few areas around Sydney.
Meantime, Victoria’s Premier Daniel Andrews acknowledged that 80% of the state’s rising coronavirus cases were transmitted in the workplace. These warning signs cannot be ignored forever and will keep the Aussie capped today.
The RBA’s latest meeting minutes are released today with Governor Philip Lowe speaking on the topic of Covid-19 and the Labour market. Could be interesting and definitely the spotlight for Aussie traders today.

AUD/USD has immediate resistance at 0.7050 and 0.7070. Immediate support can be found at 0.7000 followed by 0.6970 (overnight low 0.69727). We look to the market’s latest positioning data tomorrow after the last report saw total net Aussie short bets virtually flat. My gut tells me the price action this past week has turned the specs long. Look for a likely range today of 0.6960-0.7040. Prefer to sell rallies.

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