Home Forex Market Analysis Forex Signals AUD/USD Completes 61.8% Fibonacci Retracement – Brace for Buying Signal! 

AUD/USD Completes 61.8% Fibonacci Retracement – Brace for Buying Signal! 

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The AUD/USD currency pair failed to extend its early-day gains and edged lower around below the mid-0.7100 level, mainly due to the risk-off market sentiment triggered by the latest headlines surrounding U.S. President Donald Trump’s infection to the coronavirus (COVID-19). 

Furthermore, the renewed concern about the second wave of coronavirus infections also weighed on the market trading sentiment, which eventually undermined the perceived riskier Australian dollar and contributed to the currency pair declines. In the meantime, the U.S. policymakers’ failures to break the deadlock over the COVID-19 stimulus talks also keeps the market trading sentiment under pressure. Across the ocean, the broad-based U.S. dollar strength, supported by the risk-off market sentiment, also played its significant role in lowering the currency pair. 

On the contrary, the upbeat Aussie Retail Sales data showed that the Australian Retail Sales shrank lesser than -4.2% forecast to -4.0% in September, becoming the key factor that helps the currency pair limit its deeper losses. 

Concerns over the resurgence of the coronavirus pandemic have been ruining the hopes of the global economic recovery, which keeps the market trading sentiment under pressure and weakened the perceived riskier Australian dollar. The global death toll has crossed the 1 million mark, and the world is becoming a gloomy place once again. In America, the pandemic has infected more than 7.2 million and killed more than 206,000. Meanwhile, Europe’s worst COVID-19 center, Madrid, is considering fresh lockdown restrictions in the coming days. Moscow’s mayor ordered companies to send at least 30% of their staff home, as many European countries reported new infections records. 

Apart from this, the chatters over the U.S. President Donald Trump’s infection to the coronavirus (COVID-19) and U.S. policymakers’ failures to break the deadlock over the COVID-19 stimulus talks also exerting downside pressure on the market risk tone. However, the Democrats pushed their bill amount of $2.2 trillion through the house to boost the pessimism surrounding the discussions as Republicans are less interested in approving anything beyond a $1.5 trillion package.

On the contrary, the currency pair’s losses were capped by the upbeat Aussie Retail Sales data, which instantly gave some support to the Aussie currency and helped the currency pair limit its deeper losses. At the data front, the Australian Retail Sales beat the preliminary forecast of -4.2% with -4.0% prints in September. In doing so, the data reverses the previous month’s 3.2% advances.


Daily Support and Resistance

S1 0.6878

S2 0.6959

S3 0.6994

Pivot Point 0.704

R1 0.7075

R2 0.7121

R3 0.7202

On the 2-hour timeframe, the AUD/USD pair has completed a 61.8% Fibonacci retracement around the 0.7138 level, and above this, the odds of bullish trend continuation will remain high until the 0.7174 level. The MACD histograms are also becoming weaker and signaling that the sellers are exhausted, and bullish may enter in the market now. Considering this, we have entered a buying trade in the AUD/USD pair. Checkout a trading plan below.  

Entry Price – Buy 0.71649

Stop Loss – 0.71249

Take Profit – 0.72049

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

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