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The Aussie is on the move higher on the session to spark some interesting technical setups, including a resistance break on AUD/USD. Will it gain some legs with the upcoming potential catalysts from Australia? 

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Fresh Market Headlines & Economic Data:

Oxford-AstraZeneca Covid Vaccine Study Shows Dual Immune Action

EU summit negotiations ‘moving in right direction’, von der Leyen says

UK housing mini-boom is gathering pace, property firm Rightmove says

Growth in UK shopper numbers stalls after lockdown easing rush

Oil falls as virus infections rise, eyes on EU recovery plan

German Producer prices in June 2020: -1.8% on June 2019

In May 2020 the current account of the euro area recorded a surplus of €8 billion, compared with a surplus of €14 billion in April 2020.

The Business NZ Performance of Services Index in New Zealand rose to 54.1 in June from a revised 37.5 in the prior month

BOJ debated deflation risk at June meeting, cautious of bolder steps: minutes

Japan 1st-half exports fall 15%, sharpest drop in decade due to virus

Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:

Japan Inflation Rate at 11:30 pm GMT
Australia RBA Meeting Minutes at 1:30 am GMT (July 21)
RBA Governor Lowe Speech at 2:30 am GMT (July 21)
New Zealand Credit Card spending at 3:30 am GMT (July 21)

What to Watch: AUD/USD

AUD/USD 1-Hour Forex Chart
AUD/USD 1-Hour Forex Chart

On the one hour chart above, we can see AUD/USD retesting strong resistance just above the 0.7000 major psychological handle with a little bit of momentum today. That could be a reaction to the very position COVID-19 vaccine news from the Oxford-Astrazeneca team, but it’s a bit tough to tell with risk sentiment mixed and not major news from the U.S. or Australia on the session.

But the strength is something to watch, especially ahead of potential catalysts from Australia in the upcoming Asia session, in the form of the RBA meeting minutes and a speech from RBA Governor Lowe. The thing to watch out for is if the RBA is concerned about the prospect of another lockdown in Australia and any outlook on stimulative action that may come from it.

If we see little concern from the RBA of a further deep downturn in the economy, the Aussie could have legs to break out higher against the majors. If AUD/USD can sustain above the 0.7000 handle, then it’s likely to draw in buyers who may shoot for the June and July resistance area between 0.7040 – 0.7060.

If we see the RBA increase their worries of another lockdown and potential economic slowdown, traders will likely price in the potential for more stimulative action, and if the leads to a break in the rising ‘lows’ pattern on the chart above, more traders could jump on that signal and create a momentum move lower. This of course assumes a continued mixed risk sentiment picture on the session, and is dependent on how fearful the RBA’s outlook is. If this scenario plays out, then traders could go for the June and July range lows around 0.6930, well within reach given the daily ATR range of around 65 – 70 pips.