AUD/USD PRICE OUTLOOK: AUSTRALIAN DOLLAR BULLISH TREND CLASHES WITH TECHNICAL RESISTANCE, CHINA TENSION EYEDAUD/USD worth motion
AUD/USD PRICE OUTLOOK: AUSTRALIAN DOLLAR BULLISH TREND CLASHES WITH TECHNICAL RESISTANCE, CHINA TENSION EYED
- AUD/USD worth motion dropped sharply after one other rejection on the 0.7000-handle
- Australian Greenback bulls look in the direction of development help to maintain the Aussie rally
- US Greenback may strengthen if sentiment deteriorates amid escalating China stress
The professional-risk Australian Greenback is buying and selling on its again foot with spot AUD/USD down by about 0.31% up to now at present. AUD/USD worth motion was within the inexperienced early on Thursday’s session, however after failing to advance previous the psychologically-significant 0.7000-mark but once more, the Aussie took a fast 50-pip spill to intraday lows.
AUD/USD PRICE CHART: 15-MINUTE TIME FRAME (09 JULY 2020 INTRADAY)
Australian Greenback draw back additionally seems fueled partly by headlines that time to rising potential for materials escalation in US-China stress. This follows experiences detailing that the US authorities is finalizing laws in opposition to prime Chinese language tech corporations – similar to Huawei, ZTE, Hikvision and others – that will ban the acquisition of products and companies resulting from nationwide safety dangers.
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This bearish basic improvement, together with limitations of technical resistance across the 0.7000-handle, have potential to strain AUD/USD worth motion decrease. Additionally, because the sturdy advance by spot AUD/USD worth motion begins to stall, it’s potential {that a} Bollinger Band squeeze lurks on the horizon. This might facilitate extra Australian Greenback weak point.
AUD/USD PRICE CHART: DAILY TIME FRAME (09 DECEMBER 2019 TO 09 JULY 2020)
Nonetheless, AUD/USD nonetheless enjoys a wholesome bullish development highlighted by a sequence of upper lows notched over the past three months. Along with present intraday lows close to the 0.6950-price, this positively-sloped trendline would possibly present buoyancy to the Australian Greenback. Then again, a breakdown beneath these key technical ranges may recommend Aussie bears are taking on the drivers seat.
| Change in | Longs | Shorts | OI |
| Day by day | 1% | 0% | 1% |
| Weekly | -7% | 16% | 8% |
Additionally noteworthy, an attention-grabbing anecdote extracted from the newest IG Shopper Sentiment Report suggests the pro-risk Australian Greenback has potential to proceed melting greater. A large enhance within the variety of merchants net-short since late June has been exacerbated by net-long merchants unwinding their positions.
AUSTRALIAN DOLLAR TRADER POSITIONING – IG CLIENT SENTIMENT
On stability, this has brought about a decline within the proportion of merchants net-long AUD/USD to 31.3% from about 40% two weeks in the past. Seeing that we broadly maintain a contrarian view on retail FX dealer positioning, and the truth that IG shoppers are net-short AUD/USD, the Aussie might maintain rising in opposition to its US Greenback peer.
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That stated, amid escalating Sino-American stress, the potential of one other US-China commerce struggle outbreak has gained traction, and leaves the section one commerce deal in jeopardy. This basic theme stays a serious risk to danger urge for food and the Australian Greenback, which may hinder potential advances by spot AUD/USD worth motion.
Hold Studying – USD Worth Outlook: US Greenback Exams Help as EUR, GBP, CAD Spike
— Written by Wealthy Dvorak, Analyst for DailyFX.com
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