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AUD/USD Shooting Star Candle In-Play - Can it Drive Selling?


The AUD/USD pair closed at 0.66644 after placing a high of 0.66831 and a low of 0.66099. Overall the movement of AUD/USD pair remained bullish throughout the day. The risk-sensitive Australian Dollar gained on Friday on the back of Trump's threats to respond strongly against the new security law o Hong Kong which was announced on Friday. Ahead that announcement from Trump, risk appetite in the market remained impressive, and Aussie gained traction.

Risk sentiment was already present in the market due to the reopening of economies from all over the world. However, after Trump's announcement that the US had revoked its relationship with WHO that the US thinks work in favor of China, the pair gained further. The increased tensions between the US and China will lead to a slowdown of post coronavirus global economic recovery, and this fear boosted the investors in riskier assets like Aussie.

On Sunday, China's NBS Manufacturing PMI came in as 50.6 against the expected 51.1, and Non-Manufacturing PMI came in line with the expectations of 53.6. This showed an expansion in manufacturing activity in China and further supported Aussie.T rump refrained from announcing any sanctions on China, which were widely expected, and instead, it cut its ties from WHO and banned Chinese students and researchers that US administration considers as Chinese militants to enter the US.

AUD/USD was supported in the absence of any macroeconomic data from Australia on Friday by the poor than expected US data. The Chicago PMI, UoM Consumer Sentiment, Core PCE Price Index, and Goods Trade Balance from the United States came in against the US dollar and weighed on it, which in turn rose the demand for AUDUSD pair at the ending day of the week.

Daily Technical Levels

Support Resistance

0.6646 0.6672

0.6633 0.6685

0.6620 0.6698

Pivot Point: 0.6659

Technically speaking, the AUD/USD prices are looking to retrace from 0.6770 level to trade at 0.6720 level. On the lower side, the AUD/USD prices are likely to find immediate support at 0.6675 area, while the resistance holds around 0.6735. Typically the shooting star candle drives selling bias for the pair. Therefore, the AUD/USD can drop to 0.6680 level first. We should consider taking buying trade above 0.6680 level and selling below the same. Good luck!

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