The AUD and NZD are recovering today along with risk assets after a big sell-off overnight.
The selling came on the back of the normal uncertainty in which happens in the lead up to the US election, along with growing fears around the number of COVID cases and more lockdown measure being rolled out across Europe.
For now, the bears are in control, but this morning we are seeing a bit of a recovery. But is this just a dead cat bounce? Let’s see.
From a technical perspective, the AUD/USD dropped the 0.7100 level which had been very strong recently. However, there is still the major level which is the 0.7000 mark. This morning we can see that price is already 0.31% higher and looking strong so far today. I can’t see that lower-level breaking just yet, but we could see more selling in risk assets as we approach the weekend because of the looming US election. While Biden is in front, we all remember what happened in 2016 and the massive rally that followed.
For the NZD/USD, the price action was similar. Key resistance dropped but not by much and the 0.66650 level scooped up the sellers. The range is quite solid in the Kiwi as well and we probably won’t see much happen.
I suspect we all will need to wait until the US election, before we get a big break one way or another, with the current ups and downs, just the normal pre-election movements in my opinion.