US Dollar Shines as Risk Appetite Deteriorates

Fears Over a Second Coronavirus Wave Increase

The US dollar traded higher against all the other G10 currencies on Wednesday and during the Asian morning Thursday. It most outperformed NOK, AUD, and SEK in that order, while it eked out the least gains versus CHF and JPY.

DJIA — Technical Outlook

The DJIA index took a strong hit yesterday, loosing around 700 points. The price is now trading below a short-term tentative downside resistance line taken from the high of June 9 th. However, DJIA still remains above its short-term upside support line taken from the low of April 2 nd, which may help keep the bulls in the field for a while. For now, we will take a neutral stance and wait for one of those lines to get violated, before examining the next directional move.

AUD/USD — Technical Outlook

Looking at the technical picture of AUD/USD on our 4-hour chart, the pair seems to be forming somewhat of an ascending triangle. The rate has declined in the past couple of days, however, if it moves lower, but if it struggles to break that upside support line taken from the low of June 15 th, which is also the lower side of the above-mentioned triangle, that may help the buyers get back into action. There is a possibility to see some more upside, but for now we will only aim for higher levels within that ascending triangle pattern.

As for Today’s Events

During the European morning, we get the minutes from the latest ECB meeting, where officials decided to increase their pandemic emergency purchase program (PEPP) to a total of EUR 1350bn, and remained willing to adjust all of their instruments as appropriate. We will dig into the minutes for discussions over the economic outlook and how likely another stimulus expansion is.

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