AUD/USD stays above 0.5800 with more stimulus amid coronavirus outbreak
- AUD/USD struggles to hold onto recovery gains.
- Aussie government, Fed announced further measures to combat coronavirus.
- A sustained rise in the virus numbers, the US Senate’s failure to pass the much-awaited COVID-19 Bill weigh on the risk-tone.
- The economic calendar carries less importance than the virus/stimulus headlines.
While portraying another U-turn from 0.5840, AUD/USD declines to 0.5830 at the start of Tuesday’s Asian session. The pair recently benefited from the broad US dollar weakness but failed to register much upside amid coronavirus-led risk aversion.
More stimulus, no relief…
Be it the Aussie government’s second stimulus or the Fed’s virtually unlimited Quantitative Easing (QE) nothing could renew trade sentiment as coronavirus (COVID-19) numbers keep rallying.
By the end of Monday, global cases of the deadly virus surged to 372,500 with the death toll crossing 16,380. The situation in the US and Italy is getting out of hand off-late while that of the UK also flashing red signals despite the Tory government’s dire efforts to safeguard against the pandemic.
In addition to the multibillion QE, policymakers also adhered to lockdowns and other measures to fight against the disease.
Though, nothing could stop Wall Street from flashing another negative day while the US 10-year treasury yields also dropped 15 basis points to 0.765% at the end of their Monday’s session.
The reason could be traced from the US policymakers to agree on the much-awaited $2 trillion stimulus promised earlier by the Trump administration. The opposition Democrats doubt the measure as helping corporate more and that could be a reason for them to stop the Bill during the final stages. The voting on the bill will reconvene on Friday.
Investors may take immediate clues from the Commonwealth Bank of Australia’s (CBA) PMI figures but the overall attention will be on the virus data and macro stimulus.
Technical Analysis
A two-week-old downward sloping trend line near 0.5860 acts as the nearby upside barrier ahead of 10-day SMA near 0.6000. Meanwhile, a higher low formation on the daily chart suggests further recovery but can be defied on the downside break below 0.5660.