The AUDUSD pair closed the previous week with gains near the 0.6170 mark. On Monday, amid risk-off, which returned to markets, the major lost some traction and traded near the 0.6140 levels. However, some positive news both form Australia and China checked its further steep decline.
Today in the morning, the PBOC implemented a surprise 7-day reverse repo rate cut by 20 bps from 2.40% to 2.20% and infused 50 billion yuan to its banking system. The largest reduction in nearly five years, as well as the liquidity infusion, was aimed at supporting the economy and stabilizing the financial system in the framework of G20 coordinated efforts.
Meanwhile, Australian PM Scott Morrison pledged to unveil a package of A$130 billion in the next six months to support employees who have found themselves out of work due to the coronavirus crisis. He also intends to pay a fortnight job keeper allowance of A$1500 for each employee whose work had to be suspended.
However, the efforts to improve the situation and revive the economy from the negative coronavirus impact were not able to bring much relief to markets – the China proxy Aussie couldn’t benefit from the headlines and rise amid the renewed demand for the safe-haven US Dollar. Nevertheless, the news may have kept a lid on further major’s drop and helped Australia’s S&P/ASX 200 gain nearly 7% and surge to 5,181.40.
The number of coronavirus cases continues to go up – the US, where more than 142,000 people were tested positive for the pandemic, leads the way while the number of infected people in Italia surpassed 97,000, more than 10,000 died from the virus. More countries including the UK, France, India, New Zealand, Poland and now Russia introduced tougher quarantine restrictions to curb the spread of the disease.
From the technical point of view, the AUDUSD pair trades in the range of 0.6110-80 and holds above its SMA200 (today at 0.5915) on the 1-hour chart. On Tuesday, Australia will publish the new home sales report from the HIA and later on Friday the retail sales. However, in the light of recent events coronavirus headlines will as usual steal the show leaving the economic readings behind. The support is at 0.6020, 0.5870 and 0.5700 while the resistance is seen at 0.6195, 0.6275 and 0.6385.