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AUD/USD Symmetric Triangle Pattern - Traders Brace for a Breakout! 

EagleFX

During Wednesday's Asian trading session, the AUD/USD currency pair extended its previous session bullish moves and rose above the level of 0.6900 due to the fresh risk-on rally underpinning the perceived riskier currencies like the AUD and contributed to the currency pair gains. As well as, the reason for the currency pair gains could be attributed to the fresh optimism about the UK-Australia trade deal, which also benefited the Aussie and provided support to the pair.

On the other hand, the risk-on market sentiment pushed the broad-based U.S. dollar lower, which exerted some downside pressure on the currency pair. The AUD/USD is trading at 0.6903 and consolidated in the range between the 0.6852 and 0.6923.

However, the optimism about Fed's changes to its bond-buying program and report that the Trump administration was planning to inject a $1 trillion support bill recently overshadowed the fears of the second wave of the pandemic and triggered the risk-on market sentiment.

Moreover, the risk-on market sentiment was further bolstered by optimism about the coronavirus vaccine. However, the trial results showed that death rates were reduced by about a third in COVID-19 patients by using steroid called dexamethasone. However, fears over a second wave of coronavirus cases and geopolitical tensions turned out to be the major factors that pressure a lid on any additional gains in the global equity markets, at least for now.

At the geopolitical front, India and China faced some critical crisis, and both parties suffered losses during the fight at a disputed Himalayan border area, which also exerted additional burden on the risk momentum.

The conflict between North Korea and South Korea also intensified as North Korea blew up a joint liaison office and threatened to send troops to the DMZ. Apart from this, the gains in the currency pair could also be associated with positive reports that Australia is expected to resume a travel bubble with New Zealand in two weeks, which recently underpinned the Aussie and sent the currency pair higher. In the meantime, the UK-Australia both sides decided to launch trade talks, starting mid-July, which benefited Aussie.

At the USD front, the broad-based U.S. dollar lost its early-day gains and edged down now due to recovery in the U.S. stock futures, which suggests a recovery in the risk sentiment. Whereas, the dollar index, which tracks the greenback against a basket of six other currencies, was down 0.1% at 96.852. at 3:05 AM ET (0705 GMT).


Daily Support and Resistance

S1 0.6576

S2 0.6725

S3 0.6822

Pivot Point 0.6874

R1 0.697

R2 0.7022

R3 0.7171

The AUD/USD is trading at 0.6870, trading mostly sideways within a narrow trading range of 0.6910 - 0.6850. Violation of this could extend the selling trend until 0.6788. While in case of a bullish breakout, the Aussie can go higher to 0.6978 against the U.S. dollar. In both cases, we can have a trade. Let's keep a closer eye on the AUD/USD pair to capture a quick movement in the market. Good luck!

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