AUD/USD – Holding Firm at 0.6420, RBA, Sino-US Tensions Eyed

The Australian Dollar held its overnight and one-week lows at 0.63726 after yesterday’s risk-off move saw stocks and Asian/EM currencies fall. The Aussie Battler rebounded to finish just under 0.6430, a modest gain from yesterday’s 0.6420. Australia began to slowly ease lockdown restrictions yesterday. The antipodean country is considered among the most successful in its battle against the coronavirus outbreak. This has been a supportive factor for the Battler in the past few weeks.

FXStreet AUDUSD Chart - 05 May 2020
FXStreet AUDUSD Chart – 05 May 2020

The RBA is widely expected to keep its key interest unchanged at an all-time low of 0.25%. After cutting rates twice in March the Australian central bank will see that its policy settings are fit as the country starts easing its Covid-19 restrictions. Escalating US-China tensions will be a limiting factor for any strong potential gains.

The latest COT report saw net speculative Aussie shorts increase to -AUD 37,741 from -AUD 34,820. AUD/USD downside support lies initially at 0.6370 followed by 0.6340. Immediate resistance can be found at 0.6460 and 0.6500. Look to trade a likely range today of 0.6385-0.6485. Prefer to buy dips.

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