- AUD/USD bounces up strongly at 0.7020 to reach session highs at 0.7135.
- Optimism about a stimulus deal in the US boosts the aussie.
- AUD/USD to resume the bullish trend after a corrective move – Credit Suisse.
The Australian dollar has gone through an impressive come back on Wednesday to reverse most of the ground lost after a four-day negative streak. The aussie bounced up from Tuesday’s low at 0.7020 to appreciate beyond 1% on the day, extending to session highs at 0.7135.
Aussie soars on a risk-on market
The AUD/USD has been buoyed by the generalized risk appetite with the investors increasingly confident about the chances of a coronavirus stimulus agreement in the US.
President Trump’s comments suggesting that he is willing to accept a large relief bill in spite of the opposition shown by Senate Republicans have boosted optimism, spurring a rush for risky currencies, in detriment of the safe-haven greenback.
In this backdrop, the aussie has managed to shrug off the previous days’ negative pressure generated by the increasing chances of further monetary tightening in Novembner. The RBA confirmed yesterday by that the issue of a rate cut had been on the table on the previous meeting, which confirmed the market expectations and increased bearish pressure on the AUD..
AUD/USD expected to resume the bull trend – Credit Suisse
FX analysis team at Credit Suisse observes the recent AUD/USD pullback as a correction before resuming the upside trend: ““AUD/USD remains in a near-term corrective period, which is likely to extend further in the short-term, but we stay biased for an eventual resumption of the core bull trend following the completion of a large ‘head & shoulders’ base in July.”
Technical levels to watch
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