Today in the early European trading session, the AUD/USD currency pair extended its previous session bullish bias and took further bids around a weekly high 0.7329 level, mainly due to the risk-on market sentiment, backed by the on-going optimism over treatment for the highly infectious coronavirus. Moreover, the renewed Sino-American trade optimism also helped the market risk tone, which underpinned the Australian dollar’s perceived risk currency and contributed to the currency pair gains.
Apart from this, the broad-based U.S. dollar selling bias, triggered by the cautious mood of traders ahead of the Federal Open Market Committee (FOMC) meeting, also supported the currency pair. The AUD/USD currency pair is currently trading at 0.7329 and consolidating in the range between 0.7288 – 0.7330.
The market trading sentiment recently got the lift after the positive news from the University Of Pittsburgh School Of Medicine, suggesting that the experts produced the strongest antibody component for the coronavirus, tested over animals. Meanwhile, the Trump administration stepped back from its plans for importing cotton and tomato products from China’s Xinjiang region. This, in turn, boosted further the market trading tone.
Furthermore, the U.S. and China’s positive data, which suggests gradual recoveries in global economics, also boosted the market trading tone. Detail Suggested, China’s Industrial Production and Retail Sales surpassed forecasts for August, the U.S. NY Empire State Manufacturing Index also recovered to 17.00 and pleased the optimists. This, in turn, underpinned the perceived risk currency Australian dollar and contributed to the currency pair gains.
On the contrary, the uncertainties over the much-awaited fiscal package remain on the play as both sides do not show any clues on it. Meanwhile, the rising COVID-19 cases globally continue to fuel worries concerning the global economic outlook. This gloomy factor could be considered as the key factor that cap further gains in the currency pair.
Looking ahead, the market traders will keep their eyes on Japan’s trade numbers and Aussie housing data. Whereas, investors are also looking to the U.S. Federal Reserve’s policy meeting, scheduled to take place on the day. Meanwhile, New Zealand’s Current Account and the Pre-Election Economic and Fiscal Update (PREFU) will also key to watch. All in all, the updates surrounding the Brexit, virus, and US-China tussle will not lose their importance.
The AUD/USD pair continues to encounter resistance at the 0.7344 mark, and an upward crossover of 0.7344 mark can drive bullish bias unto 0.7412 and 0.7450 level today. On the downside, the support continues to linger at 0.7245 and 0.7149 level. Bullish bias appears powerful today; nevertheless, the focus will remain on the U.S. FOMC and Fed Fund Rate today.
Entry Price – Buy 0.73241
Stop Loss – 0.72841
Take Profit – 0.73641
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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