Equities on Wall Street rallied on Wednesday despite record-breaking 3600 Covid deaths in the US.
Meanwhile, the FDA approved a second Covid vaccine The FDA found Moderna’s vaccine to be highly effective. Vaccine optimism has boosted risk sentiment along with an improved economic outlook.
On Capitol Hill, Democrat and Republican lawmakers continue to make progress towards a new stimulus deal of around US$ 900 billion. House Speaker Nancy Pelosi said progress was being made but the timeline for a final agreement remained unclear.
Friday’s Asia-Pacific Outlook
The Australian Dollar rallied to fresh highs since the start of November. The trend could continue towards 2021.This week’s jobs report set the stage for a move higher; the unemployment rate dropped to 6.8% from 7.0%. Strong economic data dampens dovish RBA prospects.
Iron ore prices are also driving AUD/ USD strength Iron ore futures are up nearly 4% today. Australia is iron ore’s largest exporter so a jump in the price is a significant boost to the Australian economy.
AUD/USD & Iron Ore Prices
Rising Covid cases in clusters across Australia should be watched with caution for Aussie-Dollar traders. Sydney, Australia’s largest city is expecting to see cases rise and residents were advised to stay at home. for the next few days.
AUD/USD Technical Analysis:
AUD/USD has broken above late 2019 trendline resistance. The upward momentum could push prices higher. The 23.6% Fibonacci retracement level from the October swing low to yesterday’s high could be seen as a target on a pullback.
The recently broken trendline resistance could become a support