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AUD/USD Breaks Upward Channel - Weaker Dollar Drives Buying! 

EagleFX

The AUD/USD pair was closed at 0.67972 after placing a high of 0.68031 and a low of 0.66478. Overall the movement of AUD/USD pair remained strongly bullish throughout the day. The AUD/USD pair extended its two-day upward rally and rose above 0.6800 level to post multi-month-high since late- January. The surge in Aussie could be attributed to the increased risk appetite in the market after the rising protests in the United States.

The selling pressure surrounding Greenback was intensified after the increased riots in the US over the death of George Floyd. The reports about the firing, looting, and destruction started to appear from across the United States, which disrupted the US economy, which was already disturbed because of the coronavirus crisis.

Adding in the weakness of the US dollar was the ISM Manufacturing Index on Monday, which came in less than the expectations and weighed on Greenback. Wall Street's main indexes started to post gains despite unfavorable conditions in-country and reflected a risk-on market sentiment, which exerted more pressure on the Greenback.

On the US-China front, Trump announced no sanctions on China over its conference held on Friday. In response to what was on Sunday, Chinese officials said that the US's threats for imposing sanctions against Hong Kong security law were fake and that the US couldn't dare that. While Trump administration announced to ban the entry in the US for Chinese students and researchers who, according to US administration, works as Chinese militants; furthermore, the Reserve Bank of Australia will release its monetary policy statement and announce its interest rate decision on Tuesday which will be under observation by market participants to follow for further actions.


Daily Technical Levels

Support Resistance

0.6693 0.6852

0.6590 0.6908

0.6534 0.7012

Pivot Point 0.6749

The AUD/USD pair is trading sharply bullish around 0.6854 area, especially after forming a bullish engulfing candle on the 4-hour timeframe. The pair has violated an upward channel on the higher side, and now this channel is likely to support Aussie around 0.6810 level. Above this, the pair has the potential to approach the next target level of 0.6910. The 50 EMA and RSI are suggesting strong chances of buying in the AUD/USD pair. Let's consider buying over 00.6820 today to target 0.6913. Good luck!

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