The Australian Dollar led all growth currencies lower on the negative change to risk sentiment, tanking 1.65% to 0.6850 from 0.7000 yesterday. In early Asian trade, the AUD/USD pair currently sits at 0.6840 after slipping further to 0.6818 lows earlier this morning. Most of the Aussie Dollar’s sharp move higher was due to the positive risk sentiment and the fact that Australia (and New Zealand) effectively flattened their Covid-19 curves. Yesterday, only 9 new cases were reported in Australia.
The ongoing tensions between China and Australia have been for the most part ignored by FX. However, tensions between the two trading partners have heated up. China has threatened Australia by warning its students who study in Australian universities not to return due to racism against Asians in the country. Which is overplayed due to a few isolated incidents which happened at least 2 months ago.
AUD/USD has immediate support at 0.6810 followed by 0.6770. Immediate resistance can be found at 0.6890 and 0.6920. Look for the Aussie Battler to consolidate with a likely range of 0.6780-0.6920.
Prefer to sell rallies but am prepared to go on either side of this range. We can expect high volatility in this currency pair again. Happy days !