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FX.co ★ 19.11.2020: USD asserts strength: outlook for USDX, USD/JPY, AUD/USD

19.11.2020: USD asserts strength: outlook for USDX, USD/JPY, AUD/USD

Risk aversion is still dominating the market. Investors are refraining from active trading despite the news about the creation of new vaccines. AstraZeneca became the third company to announce successful trials of the Oxford COVID-19 vaccine. However, the rapid spread of the virus negates any encouraging news. On Wednesday, the government of New York City decided to close schools and switch to fully remote learning for its students. In Minnesota, the government closed all restaurants, bars, and entertainment venues for four weeks.

Investors’ concern over the state of the global economy sparked an increase in demand for safe-haven assets. It helped the US dollar to push off from the level of 92.20, which was a fairly strong support level. However, the US currency is unlikely to return to its recent highs amid market expectations for new stimulus measures from the Fed. Apparently, the regulator will intervene after so many states across the country have re-imposed quarantine measures. It may also ease its monetary policy.

The number of new cases is also climbing up in Japan and the yen has weakened amid such news. The dollar/yen pair halted its 7-day rally triggered by the appreciation of the Japanese currency. It reached the first bearish target at 104.05. Yet, it is unable to hit the second target at 103.18.

Japan logged a daily record of 2,203 new cases. Experts fear that it may turn out to be the third wave of the pandemic in the country. At the same time, the Minister of Finance said that he did not consider the adoption of new stimulus measures to support households. He claimed that conditions had not changed much since the state of emergency was lifted.

The Australian dollar is also declining. If it consolidates below the support level of 0.7264, it may well drop to 0.7222 and further to 0.7120. Traders are unwilling to open long deals on the AUD/USD pair even after the release of the positive report on the Australian labor market. Due to the growing number of new coronavirus cases, South Australia has tightened quarantine restrictions.

The data showed that the Australian economy added 178,800 jobs last month, far surpassing expectations for the loss of 30,000. However, the unemployment rate grew to the highest level - up to 7% since July amid the prolonged coronavirus crisis. Although the figure was still better than the forecast value. Economies had expected a 7.2% rise.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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