The AUD/USD failed to extend its overnight bullish bias and remains on the backfoot after returning from the 8-week high the previous day. The reason for the downbeat market performance could be associated with the latest reports suggesting that Europe’s imposed trade tariff on U.S. goods worth $4 billion. Furthermore, the mixed data from China and Australia exerted an additional burden around the market trading sentiment, which in turn, tempered investors’ appetite for the perceived riskier Australian dollar and contributed to the currency pair declines.
Elsewhere, the currency pair’s losses were further bolstered by the on-going fears of rising COVID-19 cases in the U.S. and Europe, which continually fueling worries over the economic recovery and contributes to the currency pair loss. It is worth recalling that Europe still imposing back to back lockdowns restrictions amid surging coronavirus cases. Apart from this, the U.S. registered its 4th consecutive day of over 100,000 new infections and surges from California to the Midwest and the Mexican border.
On the contrary, the prevalent optimism over a potential vaccine for the highly infectious coronavirus disease has become the key factor that helps the market trading sentiment limit its deeper losses.
It is worth recalling that Pfizer experimental vaccine – co-developed with BioNTech – was more than 90% efficient in curbing COVID-19. However, the claim was based on data from the first 94 people infected with the coronavirus in Pfizer’s large-scale clinical trial.
As in result, the greenback failed to gain any positive traction and edged lower on the day as doubts persist over the global economic recovery from COVID-19. Besides this, the mixed market sentiment also played its major role in undermining the safe-haven U.S. dollar. Thus, the U.S. dollar gains become the key factor that kept the currency pair under pressure. Meantime, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, was down at 92.707.
Daily Support and Resistance
Pivot Point 0.7277
The AUDUSD is consolidating with bullish sentiment at the 0.7283 area, having crossed over an immediate resistance level of 0.7247. For the moment, this AUD/USD is working as a support for the AUD/USD pair. On the higher side, resistance stays at 0.7341 and 0.7411 level today. Bullish bias seems strong; let’s consider taking bullish trades today, especially 0.7220. Good luck!