Chart of the day: AUD/USD

Chart of the Day: Spot AUD/USD (05/06/2020) |

The AUDUSD has rallied from the lows made on the 19th march 2020 at 0.55073 to currently test the 0.70000 level representing a gain of 27.1% under three months. From the fundamental perspective the Australian Dollar was perceived as being undervalued. Furthermore, statements from HSBC Australia strategist, Thomas Nash, anticipates that the AUDUSD could rise to 0.75 by next year, due to supportive monetary and fiscal policy measures, improving risk sentiment and the nation's record trade surplus. In addition, the Reserve bank of Australia governor, Philip lowe's remarks of continual optimism and strength in their most recent policy meeting will further strengthen the fundamental bullish bias.

In addition, with the unemployment rate for May in the U.S. projected to rise to 19.8% from the 14.7% in April while nonfarm payrolls are estimated to decline by 8 million. If we see worse than expectated numbers come out today for the U.S., this will be bullish for the Australian Dollar. From a technical perspective, the 0.70 level until price closes above it, could act as a pyscholical level of resistance. However, price is above the key moving averages and the price action suggests a continuation of recent bullish trend.

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