The AUD/USD failed to stop its previous session bearish moves and hit the one-week around well below 0.7700 level. The cautious sentiment ahead of U.S. President-elect Joe Biden’s office term, as well as the lack of major data/events and a long weekend in the U.S., played their major in undermining the market trading sentiment. The AUD/USD currency pair is currently trading at 0.7669 and consolidating in the range between 0.7659 – 0.7711.
The market trading sentiment failed to stop its last-weeks bearish moves and remains discouraged during the early Asian session as the condition of the second wave of coronavirus infections in Europe and the U.S. getting worse, which pushed the authorities to keep imposing back to back restrictions over activities in efforts to control the spread of the virus. Apart from this, the renewed inability to pass the U.S. fiscal package also weighed on the risk sentiment, which eventually weakened the perceived riskier Australian dollar and contributed to the currency pair gains. Apart from this, the reason for the market risk-off mood could also be associated with the ever-increasing US-China tussle, which puts further pressure around the market sentiment and contributes to the currency pair gains.
This, in turn, the broad-based U.S. dollar succeeded in extending its previous session gains and took some further bids during the early European session as investors still prefer the safe-haven assets in the wake of risk-off market sentiment. However, the U.S. dollar gains seem rather unaffected by the worsening coronavirus (COVID-19) conditions in the U.S. or the disappointing U.S. data. The gains in the U.S. dollar becomes the key factor that kept the currency pair under pressure. The U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose by 0.05% to 90.800 by 10:46 AM ET.
In the absence of the major data/events on the day, the market traders will keep their eyes on the BOE Gov Bailey Speaks along with the Candian Housing Starts data. In the meantime, the coronavirus saga developments could play a key role in influencing the market risk sentiment and the USD price dynamics.
Daily Support and Resistance
Pivot Point 0.7717
The AUD/USD pair is trading with a selling bias at 0.7665 level, especially after violating the support area of 0.7722 level. Closing of candles below 0.7722 level can extend selling bias until 0.7650 and 0.7610 level. Checkout our trading plan for today.
Entry Price – Sell 0.76734
Stop Loss – 0.77134
Take Profit – 0.76334
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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