Trading news

AUD/USD on a Bearish Run - 61.8% Fibonacci Retracement Eyed! 

The AUD/USD pair was closed at 0.65649 after placing a high of 0.65987 and a low of 065487. Overall the movement of AUD/USD remained bearish throughout the day. After moving on the upside track for three days, it posted losses on Thursday amid the increased US & China tensions and broad-based US dollar strength.

According to the Chinese news outlet Global Times, the spokesperson for China's National People's Congress (NPC) on Thursday said China would not remain on the back and see the United States undermine it, but it will now defend its interests.

The comments from China showed its willingness to retaliate if the US were to blame China for coronavirus spread and weighed against market sentiment. This raised US Dollar Index to 99.50 areas with a 0.3% gain on a daily basis. 

There was no macroeconomic data from Australia to be released on Thursday, which made the AUD/USD pair prices dependent on the US dollar movement. From the US side, the increase in jobless claims during last month to 2.43M from the expectations of 2.4M weighed on the US dollar. 

However, the Flash Manufacturing PMI from the US showed a surge to 39.8 from the forecasted 39.3 and supported the US dollar. The Services PMI also increased to 36.9 from the expectations of 32.6 and supported the US dollar. The strength of the US dollar after the release of economic data dragged the prices of AUD/USD pair and put an end to its previous three days upward trend on Thursday.



Support Resistance 

0.6542      0.6594

0.6519      0.6623

0.6489     0.6646

Pivot Point 0.6571

The AUD/USD pair slipped below a support level of 0.6560, and closing of candles below this level has driven sharp selling until the level of 0.6510. This level marks a 50% Fibonacci retracement level, and there are strong odds that sellers will take a breather here. This support level is also strong because of the 50 EMA, which is also likely to support the Aussie today. However, the bearish breakout of AUD/USD may lead prices lower towards 61.8% Fibonacci support 0.6480. Let's keep an eye on 0.6510 for now. Good luck! 

EagleFX Review

Friday, 22 May, 2020 / 9:08

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