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Weaker commodities and a stronger US dollar weigh on the Australian dollar -by Ecork

Talking Points AUD/USD

  • The strongest US dollar.
  • Commodity prices fall.
  • COVID-19 continues to hamper China.

Australian dollar basic background

The Australian dollar It gave up most of its marginal gains seen yesterday as risk soured sentiment. The U.S. dollar It is supply again while commodity prices have fallen. Specific Australian export goods is no exception with iron ore and gold spot Both are in red.

Exacerbating the Australian dollar’s decline is the fact that coronavirus problems in China are back with cases in Shenzhen disrupting the economy once again. However, cases appear to be spreading from Hong Kong which has led the Chinese authorities to keep the mainland China/Hong Kong border closed. The impact of commodities from the demand side has exacerbated the bearish trend of the Australian dollar.

Economic calendar for the Australian dollar / US dollar pair

There isn’t much in the way of specific Australian data, but the US will remain in focus later today with several Fed speeches including Fed Chair Jerome Powell’s first day of testimony. This could result in a swing in the dollar pairs with possible discussions about inflation and interest rates.

source: DailyFX Economic Calendar

AUD/USD technical analysis

Australian dollar / US dollar DAILY . chart

AUDUSD daily chart

The graph was prepared by Warren VenkitasAnd the IG

srice work The daily chart of the AUD/USD pair is showing a drop of about 1.2% for the day which may be cut soon as I don’t see any further drop leading to Fed Chairman Powell’s testimony.

Key resistance levels:

  • 20-day EMA (purple)
  • 0.7000

Main levels of support:

IG customer sense data: mixed

IGCS shows offline retailers long on me Australian dollar / US dollarwith 70% of traders currently holding long positions (as of this writing). At DailyFX we usually take a contradictory view of crowd sentiment, however, recent changes in long and short positions lead to short term hesitation.

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