Bottom line:  AUDUSD medium term bullish structure remains intact until prices stay above 0.5505 levels. A corrective drop towards 0.6150 remains possible in the short term, before rally resumes.

Fundamental Outlook:

AUDUSD has steadily risen to fresh monthly highs to 0.6450 until yesterday. The recent job outlook may dampen its further rise, at least in the short term. The job data to be out tomorrow is forecasting over 30K job losses in March and Unemployment rate is also set to increase to 5.4% over 5.1%.

The IMF predicts that both developed and emerging market economies shall face recession. It is believed that the ongoing COVID-19 pandemic is the worst since The 1929 Great Depression. Global equity markets may resume lower again as relief rallies are set to halt soon.

Oil prices declined by over 7.5% yesterday and closed below the 21.00 mark since March 31, 2020. The agreement between OPEC members to cut production by 10 million barrels per day over the next two months have failed to curb the drop. Possibilities of a price war is ruled out for now and this could be a positive for Oil.

Meanwhile U.S tops the list of the highest affected from COVID-19 crisis as numbers cross over 6 million. Around 325 new case were registered with 17 fresh casualties.

Technical Analysis:

AUDUSD bulls have managed to remain in control since 0.5505 lows on March 18, 2020. The single currency pair has managed to rally by over 900 pips towards 0.6450 levels until yesterday. A slight corrective drop towards 0.6150 remain possible before rallying further.

The fibonacci 0.382 retracement of the recent rally between 0.5660 and 0.6450, is seen towards 0.6152. This could be potential wave 4 termination before AUDUSD rallies towards 0.6790 levels to terminate wave 5.

Most traders might be willing to initiate fresh long positions around 0.6150 levels with protective stops below 0.5640 and projected targets above 0.6790 respectively.

Prepared by

Harsh Japee, Technical Analyst.

AUDUSD Chart

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