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  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.55%, while traders in Germany 30 are at opposite extremes with 80.61%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/bcF1DkhxFi
  • PBOC's Li: China has insufficiency of long-term capital, deficiency of equity capital. $CNH $CNY
  • the 1.4000 spot back in action on $GBPUSD that + underside of bullish trend channel stopped bulls in their tracks, at least for now https://t.co/5UxQbdXNyl https://t.co/JRsQi1hVUx
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.27% 🇳🇿NZD: 0.26% 🇪🇺EUR: 0.11% 🇨🇭CHF: -0.03% 🇬🇧GBP: -0.16% 🇯🇵JPY: -0.23% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/sx3TrZL8PC
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  • $GBPUSD briefly tested and rejected the 1.4000 level this morning and is now trading slightly lower, currently around 1.3970. 1.4000 was a key level of resistance for the pair throughout March. $GBP $USD https://t.co/ZwHnaqldfZ
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  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.55%, while traders in Germany 30 are at opposite extremes with 80.61%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/vZfq2ThhqY
Australian Dollar Eyes Chinese Manufacturing Data After FAANG Earnings

Australian Dollar Eyes Chinese Manufacturing Data After FAANG Earnings

Dimitri Zabelin, Analyst

Australian Dollar, AUD/USD, Coronavirus, FAANG Earnings – TALKING POINTS

  • QoQ US GDP data printed worst annualized contraction on record
  • FAANG earnings pushed stocks higher, reinforced bullish tech rally
  • AUD/USD teetering at critical resistance could precede tilting over

The Dow Jones and S&P 500 index closed 0.85 and 0.38 percent lower, respectively, while the tech-leaning Nasdaq benchmark ended +0.43 percent for the day. Stocks were hit hard after advanced, US GDP data for Q2 showed a 32.9 percent contraction, the fastest on record on an annualized, quarter-on-quarter basis. Having said that, the figure was not as bad as the -34.5 percent estimate.

Personal consumption also took hit at -34.6 percent, though also not as hard as analysts had expected with forecasts of -34.5 percent. Tech giants Facebook, Apple, Amazon, and Google – part of the FAANG group – released better-than-expected earnings and pushed the market cap of these companies over $5 trillion.

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The coronavirus pandemic, while devastating the global economy, has arguably been a long-term tailwind for these companies. Their economies of scale allowed them to weather the storm better than their smaller, higher cost-per-unit peers. Furthermore, working-from-home policies have placed greater demand for digital services amid government-enforced lockdown measures. This may help explain the tech sector’s impressive rally.

Foreign exchange markets broadly reflected a risk-on tilt with the Australian and New Zealand Dollars closing in the green at the expense of the haven-linked US Dollar. The petroleum-linked Canadian Dollar and Norwegian Krone were dragged lower in what appears to have been a sharp decline in oil prices that rippled out to assets affiliated with the cycle-sensitive commodity.

Friday’s Asia-Pacific Trading Session

The China-data-sensitive Australian Dollar may extend its rally if manufacturing and services PMI out of the Asian giant shows a better-than-expected print. Analysts are anticipating prints of 50.8 and 54.5, respectively, above the key 50.00 threshold that distinguishes a contractionary or expansionary outlook among purchasing managers. Jubilance from FAANG earnings may lift market spirit and amplify AUD’s gains.

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AUD/USD Analysis

AUD/USD is showing alarming hesitation as it trades on a proverbial blade’s edge at the lower tier of the 0.7206 to 0.7181 resistance range. The short-bodied nature of the candle hints an underlying lack of confidence of clearing the upper crust. Consequently, if traders believe that in the short-term there is little room to rise but a lot of space to fall, this turn of sentiment may cast a bearish shadow over AUD/USD.

AUD/USD – Daily Chart

Chart showing AUD/USD

AUD/USD chart created using TradingView

--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitriTwitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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