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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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AUDUSD The Squeeze Carries On

Article By: ,  Financial Analyst
April 30, 2020 12:17 AM

AUD/USD: The Squeeze Carries On

The AUD/USD, currently above 0.6500, continues a powerful rebound from a low marked on March 19.

Overnight the U.S. Federal Reserve hinted at keeping near-zero interest rates and asset purchases for the foreseeable future. The central bank acknowledged that the coronavirus pandemic is posing a considerable risk to the medium-term outlook for the economy.

The U.S. dollar then weakened against its major counterparts, with the ICE U.S. Dollar Index sinking to a two-week low of 99.48 and posting a four-day decline.

Meanwhile, led by the U.S. stock market (up over 2% overnight), global stock markets are enjoying a broad-based rebound as investors' risk appetite grows.

Many traders regard the Australian dollar as a "proxy trade" of the Chinese economy in view of closing trading relationship between the two countries. China's economic data are therefore important to reading the AUD/USD pair.

This morning, China's Manufacturing PMI posted at 50.8 for April (51.0 expected) and Non-manufacturing PMI at 53.2 (52.5 expected). Not bad.

So, ingredients for producing downward pressure on AUD/USD are missing.


On a Daily Chart, AUD/USD keeps trading within a Bullish Channel drawn from March 19 (closing low 0.5744, intraday low 0.5508).

It is staying comfortably above the ascending 20-day moving average, which has just crossed above the 50-day one.

Trading above the Key Support at 0.6270 (around the 50-day moving average), the pair is expected to encounter Overhead Resistance at 0.6685 and 0.6850. 



Source: GAIN Capital, TradingView


On an Intraday (30-Minute) Chart, AUD/USD remains within a Bullish Channel drawn from April 28.

Technical indicators (20-period, 50-period moving averages, relative strength index) are still so well directed to favor a bullish bias.

Key Support is located at 0.6520, while Overhead Resistance is expected at 0.6565 and 0.6590.



Source: GAIN Capital, TradingView

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