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AUD/USD Double Top Breakout – Quick Update on Buy Signal!


Today in the early European trading session, the AUD/USD currency pair extended its previous session winning streak and rose above mid-0.7000 level while representing 0.45% gains on the day mainly due to the upbeat risk sentiment underpinned the Aussie currency and contributed to the currency pair gains. On the other hand, the currency pair also benefited from the broad-based U.S. dollar weakness triggered by the risk-on market sentiment. In the meantime, the upbeat RBA minutes also exerted some positive impact on the Aussie currency and contributed to the pair gains. On the negative side, Victoria’s recent figures marked a seventh consecutive day of 300+ new cases, which capped the currency pair further upside momentum.

However, the market’s upbeat performance could be attributed to the expectations for a fiscal rescue package in Europe and the U.S. It should be noted that the European Union (E.U.) leaders showed a consensus for a possible €1.8 trillion ($2.06 trillion) coronavirus spending package meant to reverse the coronavirus-induced slump in the European economies.

Apart from this, the encouraging data from Oxford University’s coronavirus vaccine and CanSino Biologics’ drug developed in coordination with China’s military research unit also favored the risk-on market sentiment. The British drugmaker AstraZeneca (LON: AZN) and Oxford University said on Monday that its COVID-19 vaccine induced an immune response in all study participants that received two doses. Whereas, the two other separate vaccines were also developed by Cansino Biologics (HK:6185) alongside China’s military research unit, and German biotech BioNTech (NASDAQ: BNTX) and U.S. drugmaker Pfizer (NYSE:NYSE: PFE).

As in result, the broad-based U.S. dollar flashed red and edged lower on the day. However, the losses in the U.S. dollar could be attributed to the uptick in the U.S. stock futures and kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies fell 0.16% to 95.623 by 10:09 AM ET (3:09 AM GMT).

In the absence of the major data/events on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. The MI Leading Index m/m and Retail Sales m/m will be key to watch.

The AUD/USD pair has already hit our take profit levels by the time I’m finishing this update. For now, we may have an opportunity to capture a quick sell position in Aussie below 0.7102 level with a target of 0.7065 level.

Entry Price – Buy 0.70425

Stop Loss – 0.70025

Take Profit – 0.70825

Risk to Reward – 1

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

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

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