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AUD/USD up little around mid-0.6700s, lacks follow-through

  • AUD/USD gains some traction for the fourth straight session on Thursday.
  • Aussie supported by the latest optimism over treatment for coronavirus.
  • Positive US bond yields underpinned the USD and capped any further gains.

The AUD/USD pair edged higher on Thursday, albeit seemed struggling to capitalize on the move and remained below one-week tops set in the previous session.

Following the previous session's intraday pullback, the pair managed to regain some positive traction on Thursday and was being supported by hopes the economic impact from the outbreak of coronavirus could be limited.

Stronger USD capping gains

This coupled with a further improvement in the global risk sentiment – amid more positive development surrounding the coronavirus saga – further extended some support to perceived riskier currencies, including the aussie.

It is worth reporting that Sky News on Wednesday reported that UK scientists have made a 'significant breakthrough' in the development of a vaccine for coronavirus. Meanwhile, China was said to have found an effective drug to treat affected people.

However, a stronger US dollar, underpinned by stronger domestic data and the ongoing positive momentum in the US Treasury bond yields – kept a lid on any strong rally for the China-proxy Australian dollar, at least for the time being.

Adding to Monday's upbeat US ISM Manufacturing PMI, the ADP report on Wednesday showed that private-sector employers added 291K new jobs in January and the ISM Non-Manufacturing PMI edged up to a five-month high level of 55.5.

Hence, it will be prudent to wait for some strong follow-through buying before initiating any fresh bullish positions amid relatively thin US economic docket – featuring the second-tier release of the usual initial weekly jobless claims data.

Technical levels to watch

 

 

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