Risk appetite was the name of the game during the Asian session thanks to speculations that the U.S. will see a stimulus deal some time this week.
Will this translate to a longer-term bounce for AUD/USD?
Check out the top Asian session headlines before you place any orders today!
Major Forex Pairs Price Performance from MarketMilk
- Fed’s Evans says recovery could stall without more fiscal stimulus
- Fed’s Quarles suggests virus may spur new nonbank policy
- Oil falls after U.S. inventory build feeds oversupply fears
- Russia’s Novak says premature to talk about OPEC+ plans beyond 2020
- Pelosi, Mnuchin move closer to stimulus deal amid Senate doubts
- Australian retail sales fall again in Sept, but outlook firm
- Australia’s leading index signals robust growth momentum
- Australia, New Zealand dollars rise on U.S. stimulus hopes
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. inflation numbers at 7:00 am GMT
- U.K. PPI at 7:00 am GMT
- U.K.’s public borrowing at 7:00 am GMT
- Canada’s inflation report at 1:30 pm GMT
- Canada’s retail sales at 1:30 pm GMT
What to Watch: AUD/USD
AUD/USD 4-hour Forex Chart
With not a lot of market-moving headlines printed, Asian session traders caught up to their U.S. counterparts and bought high-yielding currencies like the Aussie and Kiwi in the anticipation of a stimulus deal in the U.S.
The optimism pushed AUD/USD more than 60 pips higher in the last couple of hours. Question is, can the bulls maintain their momentum?
Keep in mind that AUD/USD only has an average volatility of 65 pips on Wednesdays. That means it might take a fresh wave of buying or another bullish headline for the comdoll to make new daily highs.Aussie bulls will be happy to know that AUD/USD has recently bounced from a key inflection point after the pair sported a bullish divergence on the 4-hour time frame. If AUD/USD breaks above the .7100 immediate resistance level, then we could be looking at a trip to the .7150 or .7200 previous areas of interest.
But what if the tides turn for the comdolls? If AUD/USD finds resistance at .7100, then the comdoll could return to its .7025 support and even make a play for a downside breakout.
