Bottom line: AUDUSD might have carved a meaningful bottom around 0.5505 levels looking at the larger picture. In the immediate short term, 0.6420 levels would offer resistance and AUDUSD might retrace lower.
Fundamental Outlook:
AUDUSD rallied post the RBA decision that rejected a dovish monetary stand going forward. After hitting intraday highs around 0.6208, AUDUSD has eased off a bit as S&P cuts its rating outlook to “Negative” from “Neutral”.
World indices have rallied on FED (and other Central Banks) stimulus and also on the reduced number of affected COVID-19 cases in New York. Although the U.S still tops the list of total affected cases at 400,540; there are early signs of a decline in new cases. It remains to be seen how the curve unfolds over the next few weeks, though.
FOMC Meetings Minutes are scheduled today around 02:00 PM EST. It would be interesting to see how markets react to the event with Dow Jones facing resistance around 23700/800 region. A bearish USD outlook may boost AUDUSD prospects moving forward.
The OPEC meeting tomorrow would also be deciding over Oil’s next move. At this point in writing WTI Crude trades above 25.00, after overnight test of 23.50 levels. An agreement to cutting the production, should send Oil prices to the north side close to 35.00 levels.
Technical Analysis:
AUDUSD bulls are seen to be facing resistance around 0.6200 handle for now. A push through 0.6210 would open doors towards 0.6420 levels, going forward.
A print above 0.6420 would be encouraging for further bullish setup as an impulse would be complete from 0.5505 levels, the March 18, 2020 low. Most traders might be looking to remain long from lower levels and consider partial profit taking around 0.6420 mark. A continued rally above 0.6420 levels would test resistance at 0.6700 levels.
Overall, AUDUSD bullish structure remain intact until prices stay above 0.5505 levels as traders might be preparing to add further long positions on a corrective drop towards 0.6000 levels respectively.
Prepared by
Harsh Japee, Technical Analyst.
AUDUSD Chart
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