AUD/USD Continues to Trade on an Upward Channel – A Quick Trade Plan! - Forex News by FX Leaders

AUD/USD Continues to Trade on an Upward Channel – A Quick Trade Plan!

Posted Tuesday, November 10, 2020 by
Arslan Butt • 2 min read

The AUD/USD pair closed at 0.72791, after placing a high of 0.73397, and a low of 0.72663. On Monday, the currency pair soared to its highest level since September 16, due to the increased risk appetite. However, the gains in the AUD/USD pair were reduced and they lost in the late trading session, as the US dollar bounced back.

The risk appetite in the market was supported by the latest announcement from Pfizer and its German partner BioNtech who claim 90% efficiency of their vaccine candidate in preventing  infection with the coronavirus. They have also announced that they will be applying for emergency-use approval of their vaccine in the US later this month.

This news raised the risk-on market sentiment and supported the upward momentum of the AUD/USD pair on Monday, with the pair reaching its highest level since mid-September, amid the increased risk appetite that was already high due to Joe Biden’s victory in the US elections.

Joe Biden became the 46th President of the United States over the weekend, after gaining more Electoral College votes than Donald Trump, raising hopes for a massive stimulus package, the lack of which has been weighing on the US dollar for months. However, after the news about the vaccine development, the need for a stimulus package decreased, and the US dollar rebounded, ultimately putting pressure on the AUDF/USD currency pair.

Meanwhile, Cleveland Federal Reserve Bank President Loretta Mester said on Monday that the Fed was not out of ammunition to assist the economy, and that it could offer more assistance by adjusting its asset purchase program and implementing other tools.

She stated that the economy had recovered more powerfully than estimated, but gains have not been equally spread. Despite the optimistic news from Pfizer and BioNtech on Monday, regarding their coronavirus vaccine, Mester said that economic growth would be slow and steady. These comments also weighed on the market sentiment and forced the AUD/USD pair to lose most of its daily gains on Monday.

 

Daily Technical levels:
Support               Resistance
0.7247                 0.7333
0.7209                0.7379
0.7162                 0.7418
Pivot Point:       0.7294
The AUD/USD is trading with a bullish bias in the 0.7283 range, having crossed over an immediate resistance level of 0.7247. Now, this level is working as a support for the AUD/USD pair. On the higher side, resistance remains at the 0.7341 and 0.7411 levels today. A bullish bias seems strong; let’s consider taking bullish trades today, especially at 0.7220. Good luck!
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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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