The AUD/USD pair was closed at 0.69087 after placing a high of 0.69224 and a low of 0.68100. Overall the movement of AUD/USD pair remained bullish throughout the day. The AUD/USD pair surged on Monday after posting losses for the previous four consecutive days on the back of fresh US dollar sell-off. The US dollar index, which measures the value of the US dollar against the basket of six currencies, dropped 0.6% on the day towards 97.00 level and weighed on the US dollar, which in turn helped AUD/USD pair to find traction I the market.
Despite decreased risk appetite, the risk perceived Aussie found traction in the market amid the speech of Governor of Reserve Bank of Australia, Philip Lowe, on Monday. Lowe said that the Australian Dollar was up off recent lows because the nation struggled to handle the coronavirus relatively well than other countries so far. He also warned that the shadow of coronavirus crisis could last for years.
However, Aussie gained after Philip Lowe praised its country for emerging pretty strong form the COVID-19 crisis as compared to the other economies. The strong Australian Dollar then pushed the AUD/USD pair on the positive side to post gains on Monday.
He also said that in his opinion, this was not the right time to change the monetary policy framework, which means that record-low interest rates would remain in place for years.
He also showed his concern and said that the mentality of consumers has changed through a pandemic, and it would weigh on businesses and governments as they sought to recover.
RBA has taken interest rates toward a record low of 0.25% and bought more than 50 Billion dollars in state government bonds. It also has extended a 90 billion dollar line of credit to commercial banks to lend to small & medium-sized businesses.
However, adding in the upward trend of AUD/USD was the weakness of the US dollar across the board on Monday. The release of Existing Home Sales for May showed that it decreased to 3.91M from the expected 4.91M and weighed on the US dollar. The weak US dollar added strength to the rising AUD/USD pair on Monday, and hence the pair almost recovered losses of the previous three days.
Daily technical Levels
Pivot Point: 0.6878
The AUD/USD pair is trading with a bullish bias of over 0.6908 level, and above this, the next target is expected to target the next resistance area of 0.6975. Continuation of upward movement can lead the AUD/USD prices further higher until 0.7000 level. Recently, the pair has closed a bullish engulfing candle, which is suggesting strong odds of bullish trend continuation in Aussie. Let us take buy trades over 0.6930 level today. Good luck!