Daily Market Recap - AUDUSD

The Aussie Dollar is pulling back against its major rivals on Thursday after having shot up significantly in the past two weeks. The AUDUSD may now be looking to stabilize after such a rally, with the pair currently trading down 1.25 percent for the day.

Optimism over a quick recovery from the coronavirus pandemic has been dashed after comments from the US Federal Reserve Chairman Jerome Powell cast doubt over market bulls. The central bank has declared during its FOMC meeting that interest rates will likely remain close to zero up until 2022.

With the dovish remarks from the US Fed and underlying concerns over a pick up in coronavirus infection rates in Asia and Africa, traders are now positioning themselves for further bearish market activity in the short term.

Riskier currencies such as the Aussie Dollar has come under pressure, whereas the traditional safe-haven gold has rallied again today. Buyers may still be hope for a reversal in the current trend, citing the impressive performance of global equities up until now.

From a technical perspective, the AUDUSD fell below the immediate support level of 0.69, with the next bearish target being the 0.618 Fibonacci retracement level at 0.67919. Price action around the round figure 0.680 will determine whether sellers have enough momentum to break below.

On the upside, the pair will have to rally above the 0.71 marks in order for the bullish trend to remain in place. Weakness in the USD and upbeat economic data from China/ Australia may tilt the momentum in favor of the bulls.

(Chart Source: Tradingview 01.06.2020)

However, looking ahead, the prospects of riskier assets remain bleak in the short term. As global equities plunge and US Treasury yields decrease, investors are looking for extra protection going forward.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.