AUD/USD stays above 0.6400, near multi-week high, as risk-on sentiment continues
- AUD/USD remains on the front foot near the multi-week high.
- Expectations of easing lockdowns in Australia, New Zealand and many other developed economies seem to favor the latest upbeat sentiment.
- Fed announces measures to propel Municipal liquidity.
- A light economic calendar in Asia will keep virus updates in the spotlight.
AUD/USD continues to benefit from the risk-on sentiment while taking the bids to 0.6465 at the start of Tuesday’s Asian session. In doing so, the Aussie pair not only registers the five-day winning streak but also nears the highest levels since March 12, 2020.
Hopes of easing lockdown backs measured optimism…
The market’s latest risk-on sentiment might have taken clues from the expectations of easing lockdowns in major economies, including Australia, amid the further flattening of the curve. That said, the global scientists are still grappling to find the cure of the coronavirus (COVID-19), neither there is any major recovery in the virus fatalities.
Also contributing to the pair’s strength could be the US dollar’s weakness amid downbeat economics and hopes of further weakening in the GDP. In addition to the downbeat Dallas Fed Manufacturing Index, -73 versus -70 prior, comments from the White House Council of Economic Advisers Chairman Kevin Hassett also weighed on the greenback.
Recently, the Federal Reserve announced further measures to combat the pandemic. The US central bank took specific measures to propel liquidity into the Municipalities.
On the other hand, the Aussie Treasurer said to present the impact of the epidemic on the economy during May 12 parliament while also likely to provide an update on the economic and fiscal outlook in June.
Amid all these plays, the US 10-year Treasury yields rose six basis points (bps) to 0.664% with Wall Street also cheering the risk-on by the end of Monday’s session.
Given the lack of major data/events on the economic calendar, traders will keep eyes on the virus updates, starting with the immediate coronavirus task force briefings from the US, for fresh impetus.
Technical analysis
A sustained break beyond the mid-month high surrounding 0.6445, not to forget a successful clearance of 50-day SMA, currently near 0.6310, enables the bulls to aim for a 100-day SMA level around 0.6580 during the further upside.