AUDUSD closing in on-resistance
Are trade tensions affecting AUDUSD?
Trade tensions are there but at the moment they’re not having a major influence on the AUDUSD as buyers continue the strong start to the week. Bloomberg released news today that China may target certain Australian exports which could include wine, dairy, oatmeal, fruit and seafood. This is retaliation for Australia leading the push for an independent inquiry into the source of the Coronavirus. Currently, 100 nations are supporting this.
But it’s really all about rallying commodities and a weaker USD atm. Yes, these tensions could impact price about it hasn’t hurt the AUDUSD so far this week as its rallied 2.16% moving above .6550 US cents. Let’s take a look at some commodities that have been influencing the AUD. Copper has added 3.51% in the last 5-trading days and is currently 7.52% higher this month. Iron Ores hot month continues with price closing above $91 US/t yesterday. Combine this with a weaker USD and you can see some of the drivers that have helped push the AUDUSD 2.06% higher this week so far.
Looking at the daily chart, buyers have formed a new uptrend but price remains held in a consolidation range/ascending triangle. Yesterday and today have been great from a buyer momentum point of view but we would like to see this range/consolidation broken out of to confirm real buyer momentum. A confirmed break also starts to suggest new uptrend is solid and healthy. if we do see a breakout we think .6660 could come in as resistance as it was a prior support turned resistance area. If price fails to break out of the range be wary of the current short term momentum as the price could consolidate further.