- AUD / USD fluctuates in the 12 pip range after crossing the end of April 2018 high.
- Cautious market optimism buoyed the mood, stocks regain traction.
- China’s official NBS PMIs decorate the calendar, risk catalysts are key.
The bulls of the AUD/USD they hold the reins within the 0.7675-87 trading range, currently rising to 0.7685, during the Asian session on Thursday. The Australian pair rose to its highest level since April 2018 the day before when the US dollar hit a multi-month low amid market hope on US coronavirus (COVID-19) stimulus and mixed updates from China. Traders are currently awaiting the official manufacturing and non-manufacturing PMI figures from the China National Bureau of Statistics (NBS) for December while keeping an eye on risk factors.
The 2,000 paycheck has a bumpy road in the United States Senate …
Despite recent comments from Senate Majority Leader Mitch McConnell suggesting there is no realistic path for the $ 2,000 paycheck bill endorsed by President Donald Trump to be quickly approved, the actors of the market expect a resolution sooner or later to the long-awaited aid package. The reason could be the favor of next leader Joe Biden for the stimulus, as well as Tuesday’s second round in Georgia, which will decide who has control of the Senate. In addition to direct payments, US President Trump’s veto on the defense bill and the protection of social media companies are also in Congress for a vote.
Aside from the stimulus headlines, global markets also watched the numbers and covid updates for fresh momentum. While California recently followed Colorado to mark the second case of the covid strain in the US, vaccine developments point the way to recovery and mollified the bears.
Furthermore, China’s willingness to return two of the 12 Hong Kong activists detained for border crossing issues joins the People’s Bank of China (PBOC) willingness to maintain easy monetary policy to favor the Australian. It should be noted that China is Australia’s largest customer despite the recent dispute between Canberra and Beijing.
Against this backdrop, Wall Street benchmarks closed slightly higher near the all-time high set earlier in the week, while 10-year US Treasury yields struggled to get their bearings.
Looking ahead, AUD / USD traders are looking for upbeat figures from China’s NBS Manufacturing PMI, expected at 52.0 versus 52.1 previously, to maintain bullish momentum. Furthermore, any positive developments that favor the approval of US direct payments may add momentum to the north. However, intraday sellers may look for a little disappointment to grab new entries.
Technical analysis
Having successfully broken past the 32-month high of 0.7675, AUD / USD is ready to challenge the April 2018 peak surrounding 0.7815. However, 0.7700 will offer an intermediate stop during the rally. Meanwhile, any downside below the Dec 17 high near 0.7640 may probe short-term bulls.
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