- AUD/USD witnessed good two-way price swings on the back of incoming US election results.
- The uncertainty about the final outcome might hold investors from aggressive directional bets.
The AUD/USD pair quickly recovered around 70 pips from the Asian session swing lows and was last seen trading comfortably above the 0.7100 mark, still in the red.
The pair built on this week’s goodish bounce from sub-0.7000 level and gained some follow-through traction during the early part of the trading action on Wednesday. Increasing odds of a blue wave in the US Congress boosted the global risk sentiment and weighed heavily on the safe-haven US dollar, which, in turn, drove flows towards the perceived riskier Australian dollar.
The AUD/USD pair shot to over three-week tops, levels beyond the 0.7200 mark, but struggled to capitalize, instead witnessed a dramatic intraday turnaround. The incumbent President Donald Trump’s victory in Florida fueled fears of a contested election and provided a goodish lift to the greenback. This was seen as a key factor behind the sharp pullback of around 170 pips.
However, the fact that the vote-counting could go on for several days and the expected delay in the final outcome held investors from placing any aggressive directional bets. Reports indicate that the final results from the battleground state of Michigan will not be available until Wednesday evening. The uncertainty warrants some caution for aggressive traders.
Technical levels to watch
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