The AUD/USD pair was closed at 0.72907 after placing a high of 0.73338 and a low of 0.72823. Overall the movement of the AUD/USD pair remained bearish throughout the day. Despite the positive comments from Prime Minister Scott Morrison, the AUD/USD pair dropped on Friday amid the declining risk sentiment.
After the National Cabinet, the Australian Prime Minister said that the Victoria state’s coronavirus declines were encouraging. He confirmed the current capacity of citizens allowed to return home per week that were put in place in mid-July would be lifted to ultimately 6000 as the virus situation has improved.
Morrison said that states have agreed to boost quarantine capacity and the number of people allowed into Australia each week by mid-October. These positive comments related to the country’s virus situation failed to provide some strength to AUD/USD pair on Friday as the focus was on the US dollar.
The positive Prelim UoM Consumer Sentiment supported the US dollar for September that was advanced to 78.9 from the expectations of 75.0 and the previous 74.1. The improved consumer confidence in the US economy gave a push to the US dollar that ultimately weighed on AUD/USD pair on Friday.
Meanwhile, the risk perceived Aussie also suffered due to faded risk appetite in the market after the coronavirus cases continue to increase worldwide as the total confirmed cases surpassed the 30M figure as per Johns Hopkins University. The rising coronavirus figures supported the market’s safe-haven appetite and weighed on Aussie that dragged the AUD/USD pair’s prices on the downside.
Furthermore, the rising US-China tensions after the US government attempted to block the WeChat application’s downloading in the United States but failed to do so. These ongoing tensions between the world’s two largest economies gave a boost to safe-haven appeal and exerted pressure on the Australian dollar that dragged the AUD/USD pair on Friday.
The AUD/USD pair is trading with a selling bias at 0.7303 level, having formed a double top resistance at 0.7303 level. Seems like a good time to short the pair below 0.7303 level to capture quick 35/40 pips. Check out a trade plan below…
Entry Price – Sell 0.7314
Stop Loss – 0.7354
Take Profit – 0.7274
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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