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AUD/USD Breaks over Double Top Resistance - Upward Channel Supports 


The AUD/USD currency pair Managed To Extend Its Previous Session Gains and hovering around above the 0.7250 level, mainly due to the better-than-expected Aussie business spending data, which eventually helped the Aussie dollar to put the bids. On the other hand, the broad-based U.S. dollar weakness, backed by the cautious sentiment around the market ahead of U.S. Federal Reserve (Fed) Chair Jerome Powell's speech.

On the contrary, the fresh risk aversion wave, triggered by the US-China renewed tussle, turned out to be a major factor that kept the lid on any further gains in the currency pair. Also, capping the bullish momentum for the pair could be the latest allegation that the two-person team commissioned by the World Health Organization to China to investigate the origin of the coronavirus pandemic did not reach Wuhan epicenter of the virus outbreak. The AUD/USD currency pair is currently trading at 0.7255 and consolidating in the range between 0.7228 - 0.7264.

Elsewhere, the market risk tone has been sluggish since the day started, possibly due to the renewed conflict between the U.S. and China. The war between both parties fueled after the Dragon Nation fired missiles in a military drill near the South China Sea. In return, the Trump administration sanctioned 24 those companies who are helping China to mark its existence in the South China Sea. In turn, China's Foreign Ministry considered the U.S. sanctions as a gross interference of its internal affairs. In the meantime, China's Defense Ministry also said that its military wouldn't dance to the U.S.' tune. This eventually exerted downside pressure on the trading sentiment and capped further upside in the currency pair.

Also weighed on the risk sentiment is the rising coronavirus cases in Asian and Europe, fueling worries about the global economic recovery. As per the report, the coronavirus cases increased to 236,429, with a total of 9,280 deaths, as per the German disease and epidemic control center, Robert Koch Institute (RKI) report. In the meantime, the cases were raised by 1,576 in Germany on Tuesday against Monday's +1278. Whereas the death toll also increased by 3. On the contrary, the stabilizing virus figures in Australia, China, the U.S., and Japan slightly help the market trading sentiment limit its deeper losses and might help the currency pair.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction on the day, as well as the losses could be associated with the doubts about the U.S. economic recovery ahead of Fed Chairman Jerome Powell's speech at Thursday's Jackson Hole symposium themed. However, the losses in the U.S. dollar became the key factor that kept the currency pair's higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.12% to 92.882 by 11:59 PM ET (4:59 AM GMT).

Looking forward, the market traders await the Federal Reserve Chairman Jerome Powell's speech in the Jackson Hole Symposium. As well as, America's preliminary readings of the second quarter (Q2) GDP, which is expected -32.5% versus -32.9% will be key to watch.

Daily Support and Resistance

S1 0.7086

S2 0.7133

S3 0.7164

Pivot Point 0.7181

R1 0.7211

R2 0.7228

R3 0.7276

The AUD/USD price is trading bullish at 0.7250 level, heading higher unto resistance level of 0.7279. Overall, the AUD/USD pair trades with a bullish bias as the 50 EMA supports the buying trend. Recently, the AUD/USD pair has closed a bullish engulfing candle below 0.7277 resistance. A bullish breakout of 0.7277 resistance can lead AUD/USD price further higher unto 0.7325 while the support continues to hold around 0.7218. The RSI is also in support of the buying trend today. Good luck!

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