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AUD/USD Choppy Session Continues – Brace for a Breakout! 

The AUD/USD pair closed at 0.73044, after placing a high of 0.73238, and a low of 0.72660. The AUD/USD pair was higher on Friday, due to an improved risk sentiment, after the latest optimism regarding the coronavirus vaccine developments. The US dollar was also higher on Friday, after the latest disagreement between US Treasury Secretary Steven Mnuchin and the Federal Reserve. Mnuchin called for an end to some of the Fed’s pandemic lending, asking that $ 455 billion allocated to the treasury under the CARES ACT be used for other purposes. However, the Federal Reserve refused, disagreeing with the proposal.

The US dollar was weak on Friday, after reports suggesting that the Republican and Democrat leaders in the US Senate had agreed to resume talks on another coronavirus stimulus package. The weak US dollar added strength to the AUD/USD pair on Friday and supported its gains. Furthermore, another factor involved in the weakness of the US dollar was the rising number of coronavirus cases in the US. According to Johns Hopkins University, the US reported about 185,000 new cases on Thursday, which set a record high, together with an increased rate of hospitalization, by about 50%, in the last two weeks.

On the data front, at 05:30 GMT, Australian Retail Sales figures for October came in at 1.6%, compared to the previous -1.1%. There was no macroeconomic data from the US on Friday, and the AUD/USD pair continued following the weakness of the US dollar and the risk sentiment.

On the last day of the week, the market risk sentiment supported the Aussie, which is perceived as risky, on the last day of the week, after Pfizer and BioNtech said that they would be applying to the American FDA for emergency authorization of their coronavirus vaccine. Furthermore, AstraZeneca and Oxford University also said that their vaccine was effective in preventing the virus and increasing immunity in old people. The Aussie gained traction after the rising risk sentiment, providing support for the AUD/USD pair.

Daily Technical Levels

Support           Resistance

0.7258             0.7312

0.7229            0.7337

0.7205            0.7366

Pivot Point:   0.7283

The AUD/USD is consolidating at around 0.7291, holding below an immediate resistance area at the 0.7330 level. The AUD/USD is likely to remain supported over the 0.7270 level, and it may find resistance around the 0.7330 mark. A bearish breakout at the 0.7272 level could extend the selling trend until the 0.7260 level today, so let’s keep an eye on the 0.7290 level. Conversely, a bullish breakout at the 0.7341 level could lead the AUD/USD price up further, until the 0.7397 level today. Good luck!

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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