AUD: bearish prospect

Information is not investment advice

The Australian dollar set a strong upward trend over a month. Will AUD loose its gains soon?

The Australian dollar gained last week on the news about the potential effective vaccine and the prospect of an upcoming recovery as economies were reopening. However, there won’t be any important economic reports from Australia this week. That’s why, all the movements of the Australian dollar will depend mostly on risk sentiment.

US-China tensions can escalate into Australia-China

The number-one trending topic these days is the US-China relationship. There had been already tensions between two world-largest economies, but they were worsened even more by China’s plans to impose a security law in Hong Kong. Most Western countries are against this law as it violates human rights.

Moreover, Australian Prime Minister claimed his support for Hong Kong’s autonomy that deteriorated the Australian relationship with China, as well. AUD was already under pressure by US-China tensions, but now it can have a direct conflict with China. It may turn out really badly for the aussie as China has been its main trading partner. Also, China has already banned imports of meat from Australia and imposed some extra tariffs. AUD will be under huge threat, if China continues its sanctions.

All eyes on the US-China phase-1 trade deal now. As any fresh impulse can have a huge negative impact on the Australian dollar.

Technical outlook

The AUD/USD had been rising since March 20. Nevertheless, it started contracting on May 21. It looks like a regular correction, but buyers are worried as the fundamental outlook is quite bearish. If it manages to break through the support level at 0.649, it will go even deeper to 0.64. Retracement levels are at 0.660 and 0.666.

Similar

17.06.2021 18:39 Will the stocks of semiconductor producers rebound soon?

The amount of problems caused by the coronavirus pandemic is huge…

01.06.2021 17:36 Summer starts with bullish ride in the US stock market

The first day of summer is here! What was May like for the US stock indices? And, most importantly, what should we expect next?

31.05.2021 17:05 How to trade on OPEC meeting?

The world’s largest oil exporters, OPEC+ nations, will meet on Tuesday. The meeting is expected to start at 15:30 GMT+3.

Share with friends:

Choose your payment system

Phone number

Select the best time for us to call you.

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.