Today in the European trading session, the AUD/USD currency pair succeeded in stopping its previous session losses and took fresh bids above the 0.7280 level as the U.S. stock futures turned positive. The fresh gains were backed by the optimism over a potential vaccine/treatment for the highly infectious coronavirus, which eventually underpinned the perceived risk currency Australian dollar and contributed to the currency pair gains.
On the contrary, the broad-based U.S. dollar ongoing strength, backed by the upsurge in the U.S. Treasury bond yields, kept a lid on additional currency pair gains. Also, capping the quote upside momentum could be the ongoing US-China tussle. The AUD/USD currency pair is currently trading at 0.7283 and consolidating in the range between 0.7251 – 0.7288. Moving on, the market traders seem reluctant to place any strong position ahead of U.S. Nonfarm Payrolls.
It is worth recalling that the market trading sentiment was supported by optimism over a possible vaccine and treatment for the highly infectious coronavirus. Also, supporting the trading sentiment factor could be the ongoing chatters between the House of Speak Nancy Pelosi and Treasury Secretary Steve Mnuchin concerning the U.S. stimulus package. Tthe House of Speak Nancy Pelosi and Treasury Secretary Steve Mnuchin agreed on the stop-gap funding before the current bill expires on September 30. Also supporting the upticks in U.S. stocks future could be the Fed policymakers’ clears view of keeping the monetary policy easy and without doubt, unlike others. In turn, this underpinned the perceived risk currency Australian dollar and extended some support to the currency pair.
On the contrary, the renewed conflict between the U.S. and China fueled after the Dragon Nation warned the U.S. to cut its American debt holdings. This step has taken by China after the Trump administration announced extra hardships for Beijing diplomats. This eventually exerted downside pressure on the trading sentiment and capped further upside momentum in the U.S. stock futures.
At the USD front, the broad-based U.S. dollar succeeded in gaining positive traction and edged higher on the day amid mixed sentiment. The U.S. dollar gains were further bolstered by the ongoing upsurge in the U.S. Treasury bond yields. However, the U.S. dollar’s modest gains became the major factor that capped the pair’s upside momentum. Whereas, the U.S. Dollar Index Futures that tracks the greenback against a bucket of currencies inched up at 92.47 by 10:23 PM ET (2:23 AM GMT).
Moving on, the August month’s employment data for the U.S., which is scheduled to release at 12:30 GMT, will be key to watch on the day. The headline U.S. Nonfarm Payrolls (NFP) data is expected to drop to 1400K against 1763K prior, while the Unemployment Rate may fall from 10.2% previous to 9.8%. As well as, the coronavirus (COVID-19) updates, U.S. stimulus news, and the US-China tensions could not lose their importance on the day.
The AUD/USD pair traded distinctly bearish to linger at 0.7268 mark, achieving critical support at 0.7250 and resistance at 0.7277. Breach of this area may define the next move in the AUD/USD pair. On the higher side, the AUD/USD pair may encounter resistance at 0.7340 and support at 0.7225. The trend will be concluded following the announcement of NFP figures later through the U.S. session.
Entry Price – Buy 0.7285
Stop Loss – 0.7245
Take Profit – 0.7325
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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