AUD/USD – Overnight Rebound to be Short-lived, Uncertainty Looms

The Australian Dollar rebounded to finish its New York session at 0.6905 from 0.6870 yesterday, boosted by the rally in equities and risk assets. AUDUSD peaked at 0.69119, near two-week highs. This morning Australia’s Commonwealth Bank Manufacturing Index rose to 51.2, beating expectations of 49.8. The Aussie AUDUSD did not react to the number, static at 0.6902. Overnight low for the Aussie was 0.68328.

AUDUSD DailyFX H1 Chart - 01 July 2020
AUDUSD DailyFX H1 Chart – 01 July 2020

Meantime Australia’s second most populous State, Victoria moved to shut down 10 suburbs on the outskirts of Melbourne, the capital city due to “unacceptably high” rates of coronavirus transmission. Victorian Premier Daniel Andrews did not rule out wider lockdowns. While on a global basis, Australia’s total Covid-19 cases are comparatively small, its total daily new cases have almost doubled in the past few days due to the spike in Victoria. Today’s Australian Business Insider reports that flights have been diverted from Melbourne as Victoria tries to stem the coronavirus outbreak. This will continue to be a headwind to further gains in the Aussie Battler. The spotlight today falls on China’s Caixin Manufacturing PMI report as well as tomorrow’s US Employment number.

AUDUSD has immediate resistance at 0.6920 followed by 0.6950. Immediate support can be found at 0.6870 and 0.6840. The next support level lies at 0.6810. Look for consolidation today between a likely range of 0.6820-0.6920. Prefer to sell into any rallies toward 0.6920.

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