AUD/USD Retraces Back – Good Time to Buy?
Arslan Butt • 1 min read
The AUD/USD pair is trading with a bullish bias on Wednesday, soaring from 0.6190 to 0.6220. Bullish bias in Aussie was triggered over a better coronavirus scenario in China, especially after China lifted Wuhan city’s lockdown. Australia’s parliament passed an emergency A$130 billion stimulus package to combat the economy from the coronavirus pandemic, which is helping limit deeper declines and keep the pair above 0.6190 support.
All traders seem cautious due to the latest coronavirus situation and took bids in traditional safe-haven currencies. This eventually helped the US dollar and turned out to be one of the key factors weighing on the perceived riskier currency, the Aussie. Yesterday, AUD/USD showed bearish bias, and the reason behind this decline was the fact that ratings agency S&P reduced the outlook on the country’s AAA sovereign debt rating from stable to negative and expected the Australian economy to fall into a slowdown for the first time since 30 years.
Looking forward, Wednesday’s release of the FOMC meeting minutes will be key to watch. The investors will keep their focus on the COVID-19 clues for near-term direction.
Technically, AUD/USD has violated the resistance level of 0.6190, and the closing of candles above this level may drive bullish bias in the currency pair. Since the pair has entered the overbought zone, we may see its pricing showing a bearish retracement from 0.6225 level to 0.6190, and we can open a bullish trade there.
AUD/USD – Daily Technical Levels
Pivot Point 0.6198
On the 2 hour timeframe, the Aussie dollar has formed a bullish channel, while the 50 EMA also supports the bullish bias in the pair. Let’s place a buy limit at 0.61913 with a stop loss of around 0.61313 and take profit at 0.63023. Good luck!