AUD/USD trims losses from one-week lows as oil soars

The AUD/USD bottomed at 0.6003 after the beginning of the American session the weakest level since March 26 amid a rally of the greenback. Recently sp  |  02/04/2020 16:31
  • A rally in crude oil prices boosts equity prices, risk appetite. 
  • AUD/USD spikes to 0.6075 and retreats to 0.6050, Aussie still in negative territory.

The AUD/USD bottomed at 0.6003 after the beginning of the American session the weakest level since March 26 amid a rally of the greenback. Recently spiked to 0.6075 following a sharp increase in crude oil prices. As of writing, it is hovering around 0.6050, in negative territory for the day, still holding a bearish bias but far from the low. 

The move higher took place after comments from US President Trump regarding the oil market that sent Wall Street from negative territory to being up by almost 2%. Crude prices were already higher on Thursday and Trump’s comments pushed them further to the upside. The improvement in risk appetite helped the AUD/USD that was trading at weekly lows. 

Previously, US jobless claims data showed another dramatic increase to more than 6 million last week. The report created concerns and boosted the demand for the greenback and the yen. Fed’s Kaplan mentioned he expects a severe contraction during the second quarter, a negative reading in Q3 and then a rebound. 

In Australia, economic data due on Friday includes the March Service PMI and February retail sales. 

Technical levels

The short-term trend in AUD/USD still points to the downside. A recovery above 0.6120 would strengthen the Aussie. On the downside, critical support levels emerge at 0.6020 and 0.6000 (daily low). 

 

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