AUD/USD Bullish Bias Continues – Upward Channel Support!
Arslan Butt • 2 min read
The AUD/USD pair closed at 0.73820, after placing a high of 0.73978, and a low of 0.73520. The AUD/USD pair rose on Friday, amid the rising risk-sentiment in the market and the weakness of the US dollar. The US dollar was weak onboard, thanks to the smooth transition of power in the White House after President Donald Trump said that he would leave office if the Electoral College Votes were in favor of Joe Biden. With the increased hopes of Joe Biden taking power on January 20, the chances for massive financial support to the economy also increased, as he has been fighting for it since the CARES ACT was passed.
The rising hopes that Biden will deliver a larger fiscal aid package to curb the effects the coronavirus pandemic has had on the US economy, weighed heavily on the local currency, the US dollar. The safe-haven greenback was also weak due to rising risk-sentiment in the market, after the back-to-back reports of successful coronavirus vaccines from several candidates across the globe.
Pfizer& BioNtech reported, almost 2-weeks ago, that their vaccine was 95% effective in preventing the coronavirus, but their vaccine needs an incredibly low temperature of about -70°C during transport from one place to another, which will make the vaccine very expensive.
Meanwhile, Moderna also reported, a week ago, that its vaccine is 95% effective in preventing the coronavirus. They said that their vaccine could be stored at ordinary temperatures, unlike Pfizer’s vaccine. After these declarations, AstraZeneca said that its vaccine could provide 90% efficacy against the coronavirus after a second dose, and that it will be available at a much cheaper price than Pfizer and Moderna’s vaccines, as it can be stored at ordinary room or refrigerator temperatures.
Cheap or expensive, the vaccine itself raised hopes that economic recovery will be soon on its way, increasing the risk sentiment in the market and boosting the risk-sensitive Aussie, which in turn supported the upward momentum of the AUD/USD pair on Friday.
Daily Technical Levels
Pivot Point: 0.7363
The long-term view of the market is bullish for the AUD/USD. We were approaching a resistance level at 0.73400, which has now been violated, and the AUD/USD pair has the potential to go after the 0.7397 level. We have already captured this trade and enchased 30+ pips in a trade. For now, we will be looking for a retracement until the 0.7395-90 area before taking another buying position in the AUD/USD, as the bullish bias seems dominant today. Good luck!