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AUD/USD Trades Downward Channel


The AUD/USD pair was closed at 0.64137 after placing a high of 0.64734 and a low of 0.64019. Overall the movement of AUD/USD pair remained bearish throughout the day. Aussie posted losses on Friday and moved near 1.4000 levels on the ending day of the week. All of its weekly gains were lost on Friday amid the growing tensions between the US & China. The risk-aversion sentiment in the market weighed on Aussie pair and moved it to the one-week lowest level.

AUD/USD pair has posted losses in 4 out of the five previous days due to negative mood in the market. First, the coronavirus lockdown has been weighing on the pair's gains. Secondly, after the easing in lockdowns, the fears of second-wave of coronavirus caused the decreased hopes for quick economic recovery and weighed on Aussie pair.

Third, the increased tensions between China and the US due to the blame game between them related to coronavirus pandemic. The US has been blaming China for the past few weeks that China failed to contain the virus due to its negligence and should be punished. The US has announced different strategies through which it could punish China. China, which has remained silent throughout the accusations, came on board with an article to reply to all of the US accusations this week.

The increased tensions between the two biggest nations also weighed on the market after US Commerce Department said on Friday that the US has decided to cut off Huawei from its overseas chips manufacturers. China has said that it would give a reply to that, and now tensions have finally reached limits.

Lastly, the latest increased tensions between Australia and China also put heavy pressure on the AUD/USD pair's movement. Furthermore, the economic docket did not receive any data from Australia, so Chinese data remained under focus by Aussie traders.

Support Resistance

0.6416 0.6432

0.6406 0.6438

0.6399 0.644

Pivot Point 0.6422

On the technical side, the AUD/USD is trading slightly bullish below the triple top resistance level of 0.6467. Continuation of a bullish trend may lead the AUD/USD prices further higher towards the next resistance level of 0.6522. The RSI and 50 EMA are suggesting buying trends in AUD/USD pair is suggestings odds of bullish bias, which may lead its prices further higher above 0.6467 level. The recent bullish candle is also suggesting strong bullish sentiment among traders as the dollar seems to get weaker today. Let's look for buying over 0.6422 and 0.6472 today while selling trades can be seen below 0.6525. Good luck!

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