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AUD/USD Retests Downward Trendline - Brace to Trade Breakout! 

EagleFX

On 19th June, the AUD/USD pair was closed at 0.68338 after a high of 0.69113 and a low of 0.68295. Overall the movement of AUD/USD pair remained bearish throughout the day. The pair AUD/USD surged in the beginning trading hours on Friday but failed to remain positive and started to decline during the American session and ended up posting losses for the 4th consecutive day. At the starting session, the AUD/USD pair stayed sharp on the back of increased risk due to rising equities in WSJ, but the main indexes came under renewed pressure and reflected a souring market sentiment, which helped the greenback gather strength.

The S&P 500 & the Dow Jones Industrial Average lost more than 0,5% on the day, and the US Dollar Index extended its winning streak into a 4th straight session on Friday. The DXY moved at 97.60 level, which was the highest level since early June. However, after Jerome Powell, Fed Chair on Friday, the US Dollar lost its upward trend, which depicted a gloomy outlook for the economy and said that the road to economic recovery was long and uncertain. He also demanded more help in the form of stimulus measures from Congress.

On the data front, T 6:30 GMT, the Retail Sales from Australia for April came in as 16.3% compared to the previous month’s -17.7%. From the American side, at 17:30 GMT, the Current Account Balance showed a deficit of 104B against the expected deficit of 101B and weighed on the US dollar.

Meanwhile, the surge in AUD/USD pair in the early session also came due to the optimism raised after China announced to buy more farm products from the US to meet the requirements of phase one deal. The US dollar was influential in the market due to increased fears of the second wave of coronavirus and the rising concerns over the renewed lockdown restrictions. The strength of the US dollar pulled the AUD/USD pair from its gains, and the pair ended its day with a bearish candle.


Daily Technical Levels

Support Resistance

0.6823 0.6891

0.6795 0.6931

0.6755 0.6959

Pivot point: 0.6863

On the technical front, the AUD/USD pair seems to find resistance around 0.6880 level, holding mostly below the triple top resistance level of 0.6914 level. On the 4 hours timeframe, the AUD/USD is facing resistance extended by a downward trendline at a level of 0.6900. While the support stays at 0.6804 level. The RSI and MACD are both neutral, tossing above and below 50 and 0 levels, respectively, demonstrating neutral sentiment among traders. With that being said, we should be looking for a selling trade of around 0.9615 and buying trades around 0.6804 level today. Good luck!

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