Introduction:
The AUD/USD pair is a popular currency pair that represents the exchange rate between the Australian dollar and the US dollar. In recent days, the pair has attracted some sellers following an intraday uptick to the 0.6775 area on Wednesday and turned lower for the second successive day, though it lacks follow-through. In this article, we will explore the factors driving the recent movement of the AUD/USD pair and what traders can expect in the near future.
Factors driving AUD/USD pair:
There are several factors that have been driving the movement of the AUD/USD pair in recent days. One of the key factors is the ongoing trade tensions between the US and China. As Australia is heavily dependent on China for its exports, any escalation in the US-China trade war is likely to have a negative impact on the Australian economy and the Australian dollar.
Another factor driving the AUD/USD pair is the recent strength of the US dollar. The US dollar has been strengthening against most major currencies in recent weeks, as investors continue to seek safe-haven assets amid the ongoing coronavirus pandemic. This has put downward pressure on the Australian dollar, which has weakened against the US dollar.
Technical analysis of AUD/USD pair:
From a technical perspective, the AUD/USD pair is currently trading just above mid-0.6700s during the early part of the European session, down less than 0.10% for the day. The pair has been trading in a range between 0.6600 and 0.6800 for the past few weeks, and traders will be watching to see if the pair can break out of this range in the coming days.
If the pair can break above the 0.6800 level, it could signal a bullish trend, and the next resistance level to watch would be around 0.6900. On the other hand, if the pair falls below the 0.6600 level, it could signal a bearish trend, and the next support level to watch would be around 0.6500.
Conclusion:
In conclusion, the AUD/USD pair has been trading with a slight negative bias in recent days, but lacks follow-through. The ongoing trade tensions between the US and China and the recent strength of the US dollar are likely to continue to drive the movement of the pair in the coming days. Traders will be watching to see if the pair can break out of its current range and establish a new trend in the near future. As always, traders should exercise caution and use appropriate risk management strategies when trading the AUD/USD pair or any other currency pair.
