• Add
    Company

AUD/USD Slips Session Low Around 0.6900 - Upward Channel Supports! 

EagleFX

The AUD/USD currency pair flashing red and hit the session low near just above 0.6900 level mainly due to the broad-based U.S. dollar strength backed by renewed concerns about the U.S. economy. The reason for the decline in the currency pair could also be attributed to the risk-off market sentiment, which eventually undermined the perceived riskier Australian dollar and contributed to the currency pair losses.

Moreover, the downbeat domestic Consumer Inflation Expectations also exerted some downside pressure on the Aussie currency. As of writing, the AUD/USD currency pair is currently trading at 0.6948 and consolidates in the range between the 0.6906 - 0.7004. The AUD/USD rose to the highest level since July 2019 on Wednesday after the Fed promised to maintain the federal fund target rate unchanged at near-zero levels through 2022. This decision initially undermined the U.S. dollar but failed to keep the U.S. dollar bearish afterward.

However, the risk-off market sentiment was further bolstered by the pessimistic tone from the U.S. Federal Reserve's policy meeting as they indicated that coronavirus impact on the economy could be longer-lasting, and recovery from the pandemic would take years. As well as, they showed that the U.S. economy would fall 6.5% this year, and the unemployment rate will be 9.3% by the end of the year, which eventually damaged the investor's confidence about the U.S. recovery and kept the risk-off sentiment in the market.

As a result, the broad-based U.S. dollar erased its previous session losses and edged higher during the early Asian session as investors started to wary about sharp economy recovery after a pessimistic tone from the U.S Federal Reserve's policy meeting the day before. Besides this, the reason for the upticks in the U.S. dollar could also be attributed to the fresh on-going tussle between the United States and China, which eventually fueled the risk-off market sentiment and exerted some downside pressure on the perceived riskier Australian dollar. Whereas, the dollar index, which tracks the greenback against a basket of six other currencies, was up 0.4% at 96.318 at 3:10 AM ET (0710 GMT).

At the US-Chia front, the struggle between the United States and China remain on the card as China's Global Times played its role to criticize the U.S. Federal Reserve's latest monetary policy decision recently while saying that the U.S.' massive liquidity stimulus package will boost the U.S. government's and the world debt too.


Daily Support and Resistance

S1 105.65

S2 106.41

S3 106.67

Pivot Point 107.18

R1 107.44

R2 107.95

R3 108.71

The AUD/USD pair is testing the upward channel, which is supporting the pair around 0.6910 level. The formation of a recent hammer pattern around 0.6915 level can drive more buying until 0.7000 level today. In contrast, the bearish breakout of 0.6915 level can lead the AUD/USD pair further lower towards 0.6850 level today. The 50 periods EMA can support the AUD/USD pair today at a level of 0.6915, but the bearish crossover of this level is highly likely to drive selling until 0.6850 level today. Good luck!

EagleFX Review

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}