US stocks are set to weaken at the open today, consolidating after gains in the previous session, with investors wary amid few signs of progress over the next virus relief bill.
AUD/USD: another downswing in the row
Since May 2018, when the price of AUD against the USD crossed the level of 0.7500, the long-term trend of the currency pair has been going downwards. The closer to the current moment, the more it has been confirming the decline: since June 2019, the 200-week, 100-week and 50-week Moving Averages are in the negative order, with 50-week MA being a resistance. Therefore, in the long-term, the price is likely to continue this direction unless there are strategic factors revealed that would change the setting. In any case, the price will have to struggle its way upwards in case the market reversal starts looming in the currency horizon. On the weekly chart, the resistance of 0.6900 would be a good checkpoint for that as it marks the previous high, and since the end of 2018, the price has never broken a previously reached distinctive high.
On the H4, AUD/USD is testing the support of the 50-period MA, which is at the level of 0.6815. In fact, it has been consolidating right above this level in a gradually decreasing magnitude of price action since the beginning of December. Now, if the price breaks this support on the way down, that will be a solid proof that the recent high area has completed forming and that the market is going to move down in a more decisive way. Awesome Oscillator has already crossed the zero line, which gives the same interpretation. Altogether, if there is no new incoming information altering the market setting, we are likely to observe another cascade down today and tomorrow.
Asian equity markets traded mixed amid a lack of fresh catalysts and with the region failing to take advantage of the mild tailwinds from Wall Street.
The risk of a second wave of coronavirus is more likely to put pressure on rates. Risky assets are supported by fiscal and monetary stimulus.
The pair was falling down amid the waning US dollar. However, the situation changed this month.
Dollar continues to keep firmer on the day, all eyes on the US jobs report later.
Asian equity markets failed to sustain the positive tone from Wall Street where all major indices notched gains as technology sector outperformed for another day.