- AUD/USD wavers around the mid-0.7500s after a week-start gap-up of nearly 15-pips.
- Brexit, vaccine news recently lifted the mood, uncertainty over US stimulus, virus woes probe the bulls.
- Iron ore’s record high, US dollar weakness keeps the bulls hopeful amid a light calendar.
AUD/USD keeps the upside gap from Friday’s close while taking rounds to 0.7550 amid the initial Asian session on Monday. The aussie pair began the week’s trading with the gap-up of close to 15-pips from 0.7536 as market players witnessed welcome news from the Brexit front. Also favoring the mood could be the coronavirus (COVID-19) vaccine-related stories that battle the US covid aid stimulus headlines.
Having conveyed their “far apart” Brexit status during the last week, UK PM Boris Johnson and the European Commission President Ursula von der Leyen agreed to “go the extra mile” by continuing talks into this week. However, fears of no-deal Brexit aren’t off the table as British PM Johnson reiterates, “I’m afraid we’re still very far apart on some issues.”
Elsewhere, the US Food and Drug Administration (FDA) authorized Pfizer and BioNTech's jointly developed coronavirus vaccine for emergency use (EUA) during late-Friday and bolstered the vaccine hopes.
Also on the positive side could be the update from CNN’s Senior Congressional Correspondent Manu Raju who tweeted,
The bipartisan group of House and Senate negotiators has made a decision: Separate their proposal into two packages, per sources. One bill will be a $748B proposal, which includes money for small business loans, jobless benefits and vaccine distribution - among other matters.
— Manu Raju (@mkraju) December 13, 2020
The other: A package that includes $160 billion for state and local aid that includes liabilty protections for businesses and other entities - the two biggest sticking points. It’s uncertain how many senators and House members from the group will sign onto the second proposal
— Manu Raju (@mkraju) December 13, 2020
Furthermore, the record high of iron ore contracts on the Dalian Commodity Exchange also favors the AUD/USD bulls. Iron ore is Australia’s main export item that recently crossed the $150 mark for the most active contract.
It should, however, be noted the recall of local lockdowns in the US, as well as Germany’s national lockdown, amid the COVID-19 resurgence keep the bulls chained. Additionally, the Aussie-China tussle offers extra negative for the AUD/USD traders.
Looking forward, a light calendar in Asia will keep highlighting the risk news, mainly relating to the covid, the US aid package and the Brexit, for fresh impulse. However, the surge in commodity prices and the Canberra-Beijing tension will keep providing the background music.
Technical analysis
An upward sloping trend line from December 31, 2019, at 0.7577 now, test the AUD/USD bulls amid overbought RSI conditions, which in turn favor odds of a pullback. However, the sellers are less likely to enter unless the quote slips below the August 31 top of 0.7416.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD flirts with monthly lows near 0.6650 ahead of China's trade data
AUD/USD sits at the monthly low near 0.6650 in Tuesday's Asian trading, undermined by weak Australian sentiment data and sustained US Dollar strength. Markets turn cautious amid persistent China economic concerns, awaiting Chinese trade figures for fresh trading incentives.
USD/JPY stalls upside near 143.50, as risk sentiment sours
USD/JPY turns south toward 143.00 early Tuesday, having faced rejection near 143.50. The pair is weighed down by the renewed haven demand for the Japanese Yen, as China's slowdown woes temper risk sentiment. The downside, however, could be capped by the US Dollar recovery.
Gold price ticks lower in a familiar range amid some follow-through USD buying
Gold price struggles to capitalize on the previous day's move up from the $2,485 region and ticks lower during the Asian session on Tuesday amid some follow-through US Dollar strength. Investors trimmed their bets for a larger interest rate cut by the Federal Reserve in September following the release of mixed US monthly jobs report on Friday.
Dogecoin leads meme coin recovery following positive investor sentiment
Dogecoin is up more than 8% on Monday, as it's leading the entire meme coin sector on a rebound. The top meme coin could see a massive rally if it completes a key move within a falling wedge.
Week ahead: ECB poised to cut again, US CPI to get final say on size of Fed cut
ECB is expected to ease again, but will it be another ‘hawkish cut’? US CPI report will be the last inflation update before September FOMC. UK monthly data flurry begins with employment and GDP numbers.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.