AUDUSD Breaks Above 0.60 As RBA Injects Liquidity
AUDUSD trades higher for the fourth consecutive trading session as the rebound from 13-year lows accelerates boosted from the QE announced by Fed and the White House reach an agreement for a $2 trillion stimulus package. Reserve Bank of Australia announced that it would buy government bonds up to 2 billion maturing in January 2026 to June 2030. Last week RBA cut rates to zero and announced bond purchases to support the economic fallout from the coronavirus spread. RBA announced earlier that it purchased 900 million of state government bonds. RBA will also set a funding facility to provide credit for small & medium-sized businesses.
AUD was under selling pressure since the coronavirus outbreak as investors dump Aussie dollar due to the extensive trade relationship with China. Traders shifted their attention to safe-haven assets such as the dollar and ran away from commodities pegged currencies. Earlier this week the RBA and the Fed announced the establishment of US$60 billion swap line to provide USD in exchange for AUD. The USD will be available to local institutions by the Reserve Bank of Australia in US dollar repos against Australian dollar-denominated securities.
Read our Best Trading Ideas for 2020.
AUDUSD Technical Outlook
AUDUSD is 1.23% higher at 0.6030 as the rebound from the recent lows gaining momentum above 0.60. The technical analysis outlook for AUDUSD is still bearish despite the recent rebound. AUDUSD managed to exit the oversold area today, and that might help to attract some bids.
On the upside, first resistance for the pair stands at 0.6048 the daily high. Above that, more offers will be met at 0.6152 the high from March 17th. The next supply zone for the pair would be reached at 0.6307 the high from March 16th.
On the flip side, initial support for AUDUSD will be met at 0.5935 the daily low, while a break below might test the 0.5811 the low from yesterday’s trading session. In case of a move lower, the next support area stands at 0.5696 the low from March 23.
Don’t miss a beat! Follow us on Telegram and Twitter.
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Nikolas on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.