Bottom line: AUDUSD long term structure continues to remain bullish against 0.5505 lows in March 2020. The currency has managed to take our major price resistance around 0.7080 and bears might remain poised to produce a corrective drop towards 0.6250 levels.
Dow Jones had dropped by -0.85% yesterday and managed to close around 26395 levels. Dow futures are trading lower for now, around 26330 mark. The SP500 and NASDAQ also closed lower by -0.66% and -1.25% respectively. Asian markets are mixed with Nikkei down -1.20% and Hang Seng almost flat.
Global Indices are expected to remain under pressure amidst rising COVID-19 infections across several states in the US and other countries. China has also reported fresh cases and they have been on the rise. We might witness volatility across DXY, Indices and Gold prices with FOMC rate decision today.
AUDUSD, the risk related currency pair is trading close to its July 22 highs at 0.7183 as we prepare to publish the update. The exchange rate might come under pressure if risk assets selloff. Also, rising COVID-19 infections in Victoria and Australia-China trade relations might fuel the slide.
AUDUSD is testing its recent swing highs at 0.7183 levels and might push towards 0.7200/10 levels before reversing lower again. Please note that 0.7205 is a major resistance and bears might be preparing for a meaningful drop anytime soon.
AUDUSD has remained in control of bulls since 0.5505 lows as they managed to carve a series of higher highs and higher lows through 0.7183 recently. Ideally, after having taken out resistance at 0.7080 and nearly hitting 0.7205 mark, the currency is expected to drop lower towards 0.6250.
Also note that 0.6250 is accompanied by the fibonacci 0.618 retracement of the entire rally between 0.5505 through 0.7183 respectively. A bullish bounce remains high probability if prices manage to reach there. Traders might prepare to initiate fresh longs around 0.6250 mark.
Harsh Japee, Technical Analyst.
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