AUDUSD Taps New 2020 Highs But Gives Up Gains After Australian GDP Report

AUDUSD rallied to its year-to-date highs at 0.6982 before giving up some of its gains. The currency pair is now trading at 0.6040 which is 43 pips above its opening price. AUDUSD lost some ground following the release of Australia’s GDP report.

According to the Australian Bureau of Statistics, the Australian economy contracted by 0.3% in the first three months of 2020. This was better than expectations which were for a 0.4% contraction.

In response to this report, Australian Treasurer Frydenberg said that there are signs of progress as the country eases on its lockdown restrictions. However, he did warn that consumption was at its lowest in 34 years and that the country is not yet through the crisis.

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AUDUSD Outlook

On the 1-hour timeframe, it can be seen that the uptrend on AUDUSD is still intact. The currency pair continues to trade above it’s rising trendline when you connect the lows of May 29, June 1, and June 2. However, it’s noteworthy to point out that the currency pair just recently formed a shooting star. When you enroll in our free forex trading course, you will learn that this candlestick pattern is often considered as a bearish reversal signal.

Therefore, it means that if buyers run out of momentum, we could soon see AUDUSD trade lower. Near-term support is at the 0.6900 handle where the rising trendline is. This price also coincides with the 38.2% Fib level when you draw the Fibonacci retracement tool from the low of June 2 to today’s high. If support at this price does not hold, the next floor could be at 0.6773 where AUDUSD bottomed on June 2.

However, be wary of a strong bullish close above today’s high at 0.6982. This may mean that there are still enough buyers in the market and that AUDUSD may soon rally to its December 31 highs at 0.7031.

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