• Add

AUD/USD Trades in Upward Channel - Who's Up for Choppy Trading? 


During Friday's European trading hours, the AUD/USD currency pair failed to maintain its early-day gains and took offers near the 0.7170 level, mainly due to the risk-off market sentiment backed by the renewed tensions between the U.S. and China. The virus worries and the inability to pass the U.S. fiscal package also weighed on the risk sentiment, which undermined the perceived riskier Australian dollar and committed to the gains. On the other hand, the broad-based U.S. dollar strength backed by the safe-haven demand in the market also contributed to the currency pair losses. On the contrary, the Upbeat Aussie data becomes the key factor that helps the currency pair limit its deeper losses.

At the US-China front, the trade deal between the United States and China seems to be in danger again as U.S. President Donald Trump did not respect the Chinese commerce department's comments that trade talks will happen soon. The Trump administration warned China that President Trump was very angry over Beijing and did not want to meet China. This intensifying tussle continues to weigh on the market trading sentiment and underpinning the safe-haven assets.

Apart from this, the market trading sentiment was further bolstered by the long-lasting uncertainty surrounding the much-awaited U.S. fiscal stimulus. The previous hopes of stimulus package ended after U.S. House Speaker Nancy Pelosi recently stepped back from her previous positive remarks over the COVID-19 relief bill while saying that the "Timing is not right for a smaller coronavirus relief bill." This, in turn, made the S&P 500 Futures to mark sharp losses on the day. The same portrayed the market's risk-off mood and gave extra strength to the safe-haven assets.

Besides this, the fears of rising COVID-19 cases in the U.S., and some of the notable Asian nations like India constantly fueled fears that the economic recovery could be halted, undermining the perceived riskier Australian dollar and contributed to the currency pair gains. However, these fears were further boosted by the Federal Reserve's Wednesday's comments that the path to economic recovery from COVID-19 remains highly uncertain.

At home, the second wave coronavirus outbreak picked up further pace in late June in the Australian state of Victoria, which lead to the lockdown in Melbourne. Despite this, retail sales growth rose in July. As well as, Consumer spending may have ticked higher due to panic buying amid new lockdown restrictions. At the data front, consumer spending increased by 3.3% month-on-month in July, after June's 2.7% increase.

At the USD front, the broad-based U.S. dollar succeeded in stopping its previous session losses and remained well bid on the day as investors turned to the haven in the wake of an intensified tussle between US-China. However, the gains in the U.S. dollar kept the currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose to 93.047.

Daily Support and Resistance

S1 0.7043

S2 0.711

S3 0.715

Pivot Point 0.7177

R1 0.7217

R2 0.7244

R3 0.7311

The AUD/USD is trading at 0.7166 mark, staying over the support mark of 0.7134. Beyond this level, the pair can stay bullish until 0.7215 level. Continuation of an upward trend and breaking of 0.7215 resistance can open additional buying opportunity till 0.7279 level. Conversely, below 0.7135, the AUD/USD pair can slip drop until 0.7078 level. Bearish bias seems dominant. Good luck!

EagleFX Review

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