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AUD/USD Sideways Session - Is It Worth Placing Buy Stop?

EagleFX

The AUD/USD currency pair flashing green and rose above the 0.7000 marks for the first time since January 2020 mainly due to the risk-on market sentiment in the wake of the intensifying optimism about a sharp V-shaped recovery for the global economy which underpinned the perceived riskier Australian dollar and contributed to the currency pair gains. The broad-based US dollar weakness is also providing support to the currency pair.

The on-going conflict between the United States and China failed to leave any significant impact on the risk sentiment. However, the reason could be attributed to the increasing optimism about a sharp V-shaped recovery for the global economy, which keeps the risk market sentiment well.

The US-China tussle was further bolstered by US President Donald Trump’s criticism that the Chinese government has repeatedly stepped back from its promises with the US and many other countries. The US Secretary of State Mike Pompeo praised the Nasdaq’s move on listing rules for Chinese companies.

At the USD front, the brad-based US dollar erased its early-day modest gains and dropped to 96.600, mainly due to the risk-on market sentiment backed by optimism about a sharp V-shaped recovery for the global economy which ultimately exerted some bullish impact on the currency pair. Whereas, the US dollar index drops 0.22% to a new three-day low of 96.46, having stopped the overnight bounce near 96.80.

The reason for the uptick in the Aussie currency could be associated with the latest headlines, which indicates that Japan and Australia are expected to discuss easing border restrictions. According to Australia’s Prime Minister (PM), Scott Morrison said earlier that he is very much in support of traveling to New Zealand, which boosted the Aussie currency and contributed to the currency pair gains.

The focus now turns towards the critical US Non-Farm Payrolls figures, which is scheduled to be released later today at 1230 GMT. Upbeat US ADP jobs data boosts hopes of a better US NFP report.


Daily Support and Resistance

S1 0.671

S2 0.6811

S3 0.6867

Pivot Point 0.6912

R1 0.6968

R2 0.7013

R3 0.7114

The AUD/USD is trading at 0.6992 and consolidated in the range between the 0.6931 and 0.7013. The forex market typically remains neutral ahead of the significant news release like NFP. The bullish breakout of 0.6985 level can trigger buying up to 0.7050 level and 0.7150. The 50 EMA and RSI both are suggesting chances of buying in AUD/USD pair. The support holds at 0.6880 for now, but I would instead look for entering a buying trade upon a bullish breakout of 0.6985 level today. Good luck!

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