AUD/USD bears in control despite the US coronavirus spiraling out of control

• AUD/USD bears seeking a break of trendline support.
• US jobs in focus as the coronavirus spread spirals out of control. 

AUD/USD is currently trading at 0.6959 and down the day by 0.3%.

The price has travelled between a high of 0.7001 and a low of 0.6949 so far, bears are in control of the hourly time frame. 

Bears have taken back the baton and are seeking a test below the late June trend-line support at this juncture. 

The US dollar has picked up a safe haven bid which is weighing on risk assets towards the end of the week.

There has been little in the way of news from the Aussie calendar, bar the recent Reserve Bank of Australia meeting. 

Markets are expecting the central bank to keep the interest rates out of the negative territory.

• AUD/USD to struggle at the 0.70 handle – Westpac

• AUD/USD to extend higher towards 0.7060 on a breakout of 0.70 – OCBC

US COVID-19 is spiralling out of control

The coronavirus pandemic continues to burn through the southern and western US, Alabama, Montana and Oklahoma.

We are seeing record high counts of their seven-day average of new cases.

Nationally, the seven-day average was 52,820, up more than 7,100 cases from the same time last week, according to data tracked by The Washington Post.

The World Health Organization Director-General Tedros Adhanom Ghebreyesus warned that “the pandemic is still accelerating” and noted that the total number of cases worldwide has doubled in the past six weeks, to roughly 12 million.

Keeping an eye on US jobs

The US COVID-19 situation is spiralling out of control and the jobs market is a key indicator as to how slow of a recovery we can expect in the US.

Initial and continuing unemployment claims are edging lower from painfully high levels.

Weekly Initial Jobless Claims have come in a touch lower than expected at 1.314mn for the week of July 4th (cons 1.375mn).

However, they still remain more than double the level seen during the Global Financial Crisis.

The number of people claiming benefits under the Pandemic Unemployment Assistance program has risen exponentially, and this is something that will be amplified in data to come within extreme stresses in the jobs market.

The ISM business surveys is also an alarming factor that markets will soon have to price in, either before or after the fact. 

The data indicate that larger firms are looking to shrink their workforces in the face of lower revenues and weaker corporate profits.

Fauci says states with major outbreaks should ‘seriously look at shutting down’ again

Anthony S. Fauci, the nation’s top infectious-disease official, is advising that some states seriously consider “shutting down” again if they are facing major resurgences of the virus — a warning that conflicts with President Trump’s push to reopen the country as quickly as possible, The Washington Post reported. 

Fauci added Thursday that he hopes there’s not a need for new shutdowns, saying it “would not be viewed very, very favourably,” and urged states to pause their reopening process to slow the spread of the virus so that renewed shutdowns are not necessary.

Australia regarded as a clean bill of health

Other nations have been able to develop some kind of credibility and obtain the benefit of the doubt from markets even when cases do flare-up. See Australia and AUDUSD for example. 

However, the number of coronavirus cases in Australia crossed 9,000 on Thursday.

Most of the new COVID-19 cases,165, have been reported in the southern state of Victoria, where stringent restrictions, including a six-week lockdown in Australia’s second-largest city Melbourne, have recently been imposed.

“The domestic outlook surely doesn’t argue for further A$ gains, with Victoria’s Covid-19 resurgence prompting a return to lockdown in Melbourne for 6 weeks. This will damage both Victoria’s economy and other states as interstate tourism falters again and consumer confidence is shaken," analysts at Wetspac argued.

For now, the markets still regard the nation as having a clean bill of health and the Aussie can remain elevated for additional factors, such as the nation's current account surplus. 

AUD/USD Price Analysis

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