Daily Market Recap - AUDUSD

The Aussie dollar is trading higher against the buck on Thursday, the pair up 0.41 percent at the time of writing. However, the rally fell short of testing the 20 days EMA and we may be in store for further range-bound price action.

The AUDUSD gained buying interest today from a slight pickup in risk sentiment in the market. The commodity-linked Aussie also benefitted from the price increase in oil, gas, and metals in the recent days with copper futures trading up 2.12 percent this week.

Meanwhile, in the US, President Trump made positive comments about funding measures to help support individuals and businesses. The message came as a relief to investors who were still reeling from Trumps announcement earlier this week pouring cold water on the hopes of a fiscal stimulus deal being reached in Congress.

The minutes of the Fed meeting yesterday indicated that without additional fiscal relief, economic recovery will falter and may even be derailed. Policymakers issued a warning that US economic growth in the medium term will depend on whether Congress will be able to provide the jolt needed to spruce up the economy soon.

On the economic calendar, the US continuing jobless claims for September came in above expectations at 10.976M. Initial jobless claims however failed to impress at 840k; still, an improvement over last month‘s 849k but the recovery isn’t to be happening as fast as markets predicted.

(Chart Source: Tradingview 08.10.2020)

From a technical perspective, the main trend in the AUDUSD is nearing neutral levels. The RSI hinting at investor indecision with no clear direction in sight in the rate. The AUDUSD will have to cross above the EMA and, critically, push above the pivotal 0.72068 marks in order to sway control back in favor of the bulls. For now, Id say the market is trading a slight bearish bias and failure to mount a convincing test of the EMA could trigger a stronger correction towards the 0.71088 support 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.