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Chart of The Day AUDUSD
AUDUSD Potential Reversal Zone & Probable Price Path
AUD: Global risk sentiments are likely to get another lift to start the week on the back of the signing of the Regional Comprehensive Economic Partnership (RCEP) by 15 countries comprising ASEAN-10, China, Japan, S. Korea, Australia and New Zealand after 8 years of negotiation and covers around 30% of global GDP and population, hence the AUD could maintain a bullish course into year's end if the fundamental and technical stars continue to align. Uncertainty can kill market direction and liquidity, and enough unknowns remain around COVID-19 and global growth to curb AUD activity. However, Chinese data continue to surprise and the signing of China-backed Asia trade agreement has injected a bid into the AUDUSD. Australia hopes the trade deal will help improve trade relations with China. Despite referring to negative interest rates, the Australian central bank governor, Philip Lowe, said earlier on Monday such a move was "incredibly unlikely". Indeed, if COVID-19 vaccine news starts to counter increasing infection rates and the introduction boosts growth, the central bank could be one of the first to flip its policy stance
USD: The epidemic in the United States is still severe. More than 100,000 confirmed cases have been added for the tenth consecutive day. Last Friday, more than 190,000 infections were added, a record high. Two virus expert consultants to the US President-elect Biden said that they have no plans to implement a nationwide blockade and will only approve targeted epidemic prevention measures. The current President Trump stated that he did not admit that Biden won the presidential election and reiterated that this is a rigged election. The Trump campaign failed in legal proceedings in multiple states, among which a Michigan judge ruled that the local vote count was fraudulent and the allegations were unfounded.
From a technical and trading perspective, AUDUSD appears to continue to develop a bullish consolidation pattern, as .7200 attracts sufficient bids, bulls will target a retest of the post pandemic cycle highs at .7420 enroute to an ideal .7520. Bulls should pay attention to the price action on the retest of the prior cycle highs, as momentum divergence may encourage a corrective phase to emerge that sees price pullback to test support to .7100 before mounting a challenge of the .7500 primary objective.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!