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AUD/USD Achieves 38.2% Fibonacci Retracement - Should We Go Long?

EagleFX

The AUD/USD pair was closed at 0.69190 after placing a high of 0.69250 and a low of 0.67764. Overall the movement of AUD/USD pair remained bullish throughout the day. The AUD/USD pair pushed higher on Monday after Wall Street Journal hit higher in the market amid the rising risk sentiment. After the announcement of starting the purchase of corporate bonds in the secondary market to deal with the coronavirus crisis and minimize the loss of economy.

The stock market rose to its higher since last week on the renewed risk appetite, and the risk perceived Aussie gained traction and pushed the AUD/USD pair on the upward side. The risk sentiment was also boosted by the latest comments from the White House Adviser, Larry Kudlow. He said that Donald Trump was against the lockdown restrictions for the second time in the US economy. He also said that the renewed cases of infected people from coronavirus were not that much to call them as the second wave of the virus. Hence the fears of renewed restrictions faded away, and risk took its place.

Aussie recovered all of its previous day's losses on the back of increased risk appetite and moved above 0.6900 level on Monday.

On the other hand, the US Dollar also remained strong across the board, but the strength of the Australian dollar overcome the US dollar performance.

Furthermore, China's weak economic data kept a lid on any additional gains of this pair AUD/USD on Monday. The Fixed Asset Investment for this year dropped by 6.3% against the expected decline of 6.0% from the previous decline of 10.3%. The Industrial Production for the year in China also dropped to 4.4% from the expected 5.0% ad weighed o Yuan. Retail Sales in this year also dropped in China by 2.8% against the expected 2.3%. China proxy-Aussie was a little stressed because of poor economic data from China but managed to maintain a bullish trend throughout the day.


Daily Technical Levels

Support resistance

0.6821 0.6972

0.6724 0.7024

0.6671 0.7122

Pivot Point: 0.6874

The overbought AUD/USD slipped 0.6854 area, especially after entering into the bullish zone. For now, the pair is completing 38.2% Fibonacci retracement at 0.6900; above this level, we can expect bullish trend continuation until 0.6969. The RSI and 50 EMA are also in support of bullish bias. Thus, we should look for buying trade over 0.6900 level today with a stop loss of around 0.6880 and take profit around 0.6969. Good luck!

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