Daily Market Recap - AUDUSD

The Australian dollar is building on Tuesdays rally and is now testing the 0.72005 resistance level. AUDUSD is trading higher at the time of writing, up 0.69 percent.

The pair initially slumped below the 0.71 support level at the start of the week but has since recovered significantly from Mondays bearish hammer candle, an encouraging sign for Aussie bulls.

The catalyst behind the recovery may be attributed to further discussions of US monetary stimulus to be expected within the coming weeks and a slight uptick in the Australian Construction Index for July, boosting business sentiment in the country.

The longer-term outlook for the AUDUSD remains tied to the performance of US Treasuries and the strength of the greenback. For now, it remains probable that the US dollar will continue its run of poor performance, in turn buoying the Australian dollar towards the 0.73 marks.

From a technical perspective, the AUDUSD has been consolidating around the 0.715 marks in the past two weeks. The pair is trading at a slight bullish bias on the daily chart after having managed to stem a drop below the important 0.71 support level. The short-term range remains between the 0.725 and 0.710 price points.

(Chart Source: Tradingview 05.08.2020)

On the upside, the 0.72274 high sets last Friday will be the target to aim for. A cross above that level would likely push the AUDUSD forward to test the 0.73 psychological level. On the other hand, a failure to hold above 0.715 may trigger a correction towards the lower bound of the upward trendline channel.

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.