Overview:– The daily chart is showing undoubtedly a blood bath in the pair and in the pure selloff no one is interested to buy the pair. But Pair has marked a low of 0.6210 level which is strong support level and low of multi year’s i.e. February 2009 low. Well these should not be ignored for those who did not made any position in the AUD/USD, it’s perfect time to enter in the pair as there will no more selling pressure.
Yesterday also from starting of the session bears got the charge and damaged too much for the buyers but it was pre expected from the bears at these levels. They took the pair at 0.6210 level which is support zone for buyers and today from morning session itself we saw a short recovery rally and it bounced almost 100 pips.
But now it seems like bulls knocking the door at an initial level. We are expecting a strong counter attack from bull’s campaign. The pair has become
Fundamental Analysis:- After opening the week at an 11 year low against the US dollar at 0.6470 on Monday and closing at 0.6525, the surprise Federal Reserve 0.5% rate cut on Tuesday boosted the AUD/USD to 0.6598 despite the Reserve Bank of Australia’s (RBA) own 0.25% reduction earlier in the day. The recent rout in the global equity markets – amid growing concerns over the coronavirus outbreak – provided a strong boost to the greenback’s status as the global reserve currency.
The market worries intensified after the World Health Organization declared the novel coronavirus a global pandemic and the US President Donald Trump suspended all travel from Europe for 30 days.
The pair nosedived to its lowest level November 2008 but managed to find some support ahead of the 0.6200 round-figure mark after the Fed moved to calm an unusual disruption in the US Treasury markets.
The coordinate move by major central banks led to a turnaround in the global risk sentiment, which eventually extended some support to perceived riskier currencies, including the Australian dollar.
Meanwhile, the uptick lacked any strong bullish conviction and might still be categorized as a corrective bounce, which runs the risk of fizzling out rather quickly amid deepening panic about the coronavirus.
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have bottomed out in the near-term and positioning for any further near-term recovery move.
Technical Analysis:- From technical prospective we can see that pair is receiving the demand pressure from RSI as RSI turned up from the oversold territory and MACD indicator is also providing us some trend reversal signal. The weekly chart suggest us double bottom pattern from long term prospective which is a strong support level so here no more selling sentiments are there and we will go for buy the pair.
A recent candle is piercing pattern which is providing us trend reversal signal. Well it’s an early call but we will get further confirmation of the trend once we see a daily closing above 0.6400 level in today or tomorrow.
This week’s closing matters a lot which will decide the direction for upcoming week. Odds are in favor of bulls and intraday bias remains bullish on the pair. as long as 0.5900 level remains intact. The 0.6400 level will be the first sign of bullishness and then a daily closing above this level will open the way towards the 0.6600 and 0.6800 level.
What next:- The 0.6000 level is the key support level followed by 0.5900 level where as 0.6500 level is the key resistance level followed by 0.6600.
Trade idea:- Based on chart and studies above we can suggest that buy at 0.6280 target is 0.6500 and 0.6700 with the tight stop loss of 0.6000.
