Chart of the Day: AUD/USD

Chart of the Day: Spot AUD/USD (06/10/2020) |

With the Reserve Bank of Australia keeping interest rates unchanged at 0.25% in an attempt to shore up its economy ravaged by the effect of the coronavirus, which has led to high unemployment and a deficit of AUD 200 Billion for its 2020/2021 budget, there is the possibility that the rally seen from the lows made on 19/03/2020 at 0.55073 to the most recent high at 0.74134 on 01/09/2020, may perhaps be on the verge of resuming its downtrend. Price has been unable to sustain a close above the 200 weekly EMA. Since the swing high made on 01/09/2020, price has made lower lows and lower highs. With price currently around 0.7150, we did see range bound trading in this area from the 22/07/2020 – 27/08/2020. Hence, there is the possibility of going into a range bound market once again. However, it is more likely that we will see a trend emerge. The Dollar index is currently around 93.50 on the back of positive news that U.S. President Donald Trump was discharged from hospital and has returned to the White House. Current Dollar Index price level is an area where we have seen support historically such as on 16/09/2018. It is also in an upward sloping channel and even though it closed outside of the channel yesterday and trading below its daily 9,20 and 50 EMA, I do expect this level to hold. The U.S. elections is increasingly becoming a focus and Dollar Index strength could have major implications on the indices and precious metals.

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