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AUD/USD: On the bids above 0.5900 as trade sentiment improves

  • AUD/USD registers a three-day winning streak.
  • Broad US dollar weakness, the upbeat sentiment at home favors the Aussie pair.
  • The US activity numbers, coronavirus news and the COVID-19 package will be in the spotlight.

AUD/USD extends the previous day’s recovery gains to 0.5930, up 1.50%, amid the Asian session on Tuesday. The pair recently benefited from the broad US dollar weakness as well as upbeat sentiment at home.

Not only the early-Asian release of Commonwealth Bank Manufacturing PMI for March, which crossed 50.00 forecasts with 50.1, Westpac’s upward revision to the Aussie economy also pleases the buyers.

Increasing the bulls’ strength could be the broad US dollar weakness amid calls of further delays into the much-awaited COVID-19 Bill after the Senate failed to agree over it in the second attempt. While US President Donald Trump and Treasury Secretary Steve Mnuchin were the recent policymakers to suggest that the deal will be signed soon, the CNBC ran out the news that turns down odds of the tonight’s voting on the aid package.

Even so, the risk tone remains light amid expectations that the global combat against the coronavirus (COVID-19) will soon roll out positive results. While portraying the same, the US 10-year treasury yields rise 13 basis points (bps) to 0.78% whereas stocks in Japan and Australia mark gains.

It should also be noted that the RBA’s daily liquidity injection grew from Australia dollar 3.67 billion on Monday to 6.88 billion today.

Looking forward, the news concerning the US package as well as the US PMI will be in the focus while any updates concerning the cure could boost the recent risk-on.

Technical Analysis

Only if the pair defies the higher low formation, by slipping below 0.5700, the sellers can sneak in otherwise 10-day SMA near 0.6010 is likely upcoming stop for the Aussie buyers.

 

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