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AUD/USD Heading North - Can Double Top Provide Resistance?

The AUD/USD pair closed at 0.71608 after placing a high of 0.71669 and a low of 0.71057. Overall the movement of AUD/USD pair remained bullish throughout the day. On Tuesday, AUD/USD pair surged after RBA left the cash rate target at 0.25% and said that these rates will remain at the same level for some time as the coronavirus crisis's effect still persisted.

The RBA said that the worst of global economic contraction due to coronavirus was passed, and the downturn was not as severe as earlier expected. RBA said that outlook for the Australian economy remained highly uncertain. The RBA Governor Philp Lowe said that the economic recovery was uneven and bumpy as the coronavirus outbreak in the Victorian state had a major effect on the local economy.

The Reserve Bank of Australia announced its return to the government bond market after a pause of three months as it aims to re-anchor yields on 3-year security. RBA plans to target it through its purchasing program.

The Reserve Bank of Australia offered to purchase 500 million AUD worth of federal government securities. Governor Philip Lowe announced bond-buying resumption when the board kept its interest rates and yield target unchanged at 0.25%.

At 06:30 GMT, the Trade Balance from Australia came in as 8.20 B against the forecasted 8.80 B and weighed on the Australian dollar. In June, the Retail Sales from Australia showed an advancement of 2.7% against the forecasted 2.4% and supported Aussie. The positive data from Australia about the retail sales and Lowe's positive comments about the economic condition raised AUD/USD pair prices on Tuesday.

On the other hand, the US dollar supported the AUD/USD pair as it remained weak throughout the day. The announcement about the progress in the talks between Republicans and Democrats related to US stimulus measures weighed on the US dollar on Tuesday. The weak US dollar pushed the AUD/USD pair on the upside track and added in its early daily gains.



Daily Technical Levels

Support Resistance

0.7081 0.7161

0.7038 0.7198

0.7001 0.7240

Pivot point: 0.7118

The AUD/USD is trading bullish at 0.7205, heading towards an immediate resistance at 0.7226 level. Closing of candles below this level may drive the selling trend until 0.7160 0.7160 and 0.7119. In the case of a bullish breakout of 0.7230, the AUD/USD may go after 0.7278 level. The RSI is holding at 62, which is suggesting a bullish bias. Therefore, we should go for bullish positions over 0.7160. Good luck! 

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Wednesday, 05 Aug, 2020 / 9:46

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