Today in the early European trading session, the AUD/USD currency pair struggled to gain any positive traction and remain close to the 0.7000 regions. The broad-based U.S. dollar selling bias triggered by the sharp intraday turnaround in the U.S. Treasury bond yields also contributed to the currency pair gains. The currency pair printed a 4th-consecutive weekly gain by the end of the last week, although the coronavirus (COVID-19) worries at home.
The success of the vaccine was supporting the mild upbeat market sentiment. As well as, the diplomat provided hints of the Aussie government's upcoming stimulus to combat the coronavirus (COVID-19), which also became a key factor that lifted the currency pair higher.
Moreover, the risk-on market sentiment was further supported by the hopes of additional stimulus by governments worldwide, partly, which overshadowed the concerns about ever-increasing coronavirus cases and worsening US-China relations. At the US-China front, the on-going war between the world's top two economies remains on the card as the U.S. policymakers were considering to impose a travel ban on all members of the Chinese Communist Party.
At the coronavirus front, Victoria's latest virus figures registered a record hike with 363 new cases. Considering the worsening condition, the government has been forced to make the masks compulsory while working, not to forget maintaining social distance, citing 80% contagion. Whereas, the United States leads the world with a total of 3,739,726 cases and 140,294 deaths, as per the figures by John's Hopkins University. The US COVID-19 cases rose 2.1%, in-line with the daily average of the past week. These data indicated that both Australia and the U.S. are struggling with the pandemic's resurgence, which caped the currency pair's upside momentum.
Traders will keep their eyes on USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. Additionally, the decision from the European Union (E.U.) summit where policymakers are divided over the much-awaited stimulus will also be essential to watch.
Daily Support and Resistance
Pivot Point 0.6991
The AUD/USD is holding above 50 periods EMA at a level of 0.6960, and below this, the next support is expected to be found around a level of around 0.6935. Since the AUD/USD has formed an upward channel, we can expect a bullish trend continuation in the pair, which may lead Aussie dollar towards the next resistance area of 0.7030 and 0.7067. The recent candles with long shadows and smaller bodies are suggesting indecision among traders. In contrast, the RSI and 50 EMA are in support of buying. Let's consider taking buy trades over 0.69600 level today. Good luck!