AUD/USD extends recovery beyond 0.6350 ahead of China data dump

• AUD/USD benefits from the recent recovery in risks.
• Gilead’s remdesivir is getting noticeable success in clinical trials.
• US dollar strength, risk-off dominated market mood earlier.
• China's data, mainly the GDP, will be the key to watch while virus updates could keep markets entertained.

AUD/USD cheers the success of Gilead’s remdesivir clinical trials while rising to 0.6365, up 0.60% on a day, during the early Friday morning in Asia. In doing so, the Aussie pair bucks the previous day’s downbeat performance, portrayed mainly due to the broad US dollar strength and risk-off, while waiting for China’s key data.

Following the CNBC news suggesting the Gilead Life Science’s remdesivir is getting a huge success ratio during the clinical trials, markets dumped the previous risk-off with the S&P 500 ETF surging 2.0%.

Earlier, Wall Street managed to avoid losses with US President Donald Trump pushing for the phased re-open of the economy but the Treasury yields remain on the back foot amid worries concerning the coronavirus (COVID-19) crisis.

The pandemic issue remains center to market performance as there have been more than two million confirmed cases and the US death toll nears 31,000. This pushes New York to extend the lockdown, with Japan also announcing national emergency, but Switzerland bucks the trend to cite the restrictions’ exit measures. On Thursday, Aussie PM Scott Morrison also signaled for an exit strategy but also said, “need to be prepared for very sobering economic news in the months ahead.”

While the recent updates concerning the cure are likely to help the Aussie pair, major attention will be on China’s first quarter (Q1) GDP and March month Industrial Production, coupled with Retail Sales, figures. Although forecasts suggest downbeat figures for each of the key economic indicators, outcomes from the dragon nation have recently surprised markets. Hence, any such repetition of the surprises could offer an additional boost to the present risk reset, also propelling the Aussie quote.

Technical analysis

Failure to provide a sustained break below the monthly support-line, currently at 0.6315, pushes the pair towards confronting a 50-day SMA level of 0.6365. Though, 0.6400 and Wednesday’s high near 0.6445 hold the gate for further upside. Alternatively, downside below 0.6315 could revisit the March-end top near 0.6215/10.