FOREX Chart Of The Day: AUDUSD Vs US ELECTION
Will the AUDUSD price be affected by the US Election outcome?
We think this major currency pair could be the one to watch as both candidates could have a great effect on the pair going forward.
Trump vs China will likely continue if he is to be re-elected.
This could cause problems for the AUD.
Watch the video to learn more…
Hi guys, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.
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We are in the wake of the election, and I wanted to talk about AUD/USD. AUD/USD is a pretty key-char, and haven’t spoken about it yet.
There are some great technicals on AUD/USD, but a lot of fundamentals at play and a lot of risks when it comes to the election, and a couple of different things could happen.
So, let’s talk about the Australian Dollar in terms of what would happen on a Trump victory. Now obviously, Trump and China are having a little battle, and if he is re-elected then the likelihood is that Trump will continue to go at China.
Now, typically, that would put pressure on the Australian Dollar, okay. Because that’s very closely linked to China. And if he’s going to start pulling manufacturing away from China, then the Australian Dollar typically will get impacted by that.
So, if and only if Trump has a very decisive win, I think it’s going to be smart looking for shorts on AUD/USD, and I’m only going to say short below 0.7, okay. Because 0.7 is a huge, huge level in this market.
If I zoom out for a second. You can see all the way through here, huge, huge market or huge level on the Australian Dollar. Typically, when the price is below 0.7, we get a nice trend, and the price gravitates towards that level.
You can see when we start trending back, it gravitated towards 0.7, and you know.
Despite the bullishness, that’s looking out of the market currently. The market’s sort of pricing in a little bit of Biden wins at the moment. However, there is still a strong possibility that Trump could win.
And if Trump does win and he goes back to the sort of trade war between the US and China, then breaks below 0.7 could lead to a further decline of the AUD/USD.
Now, if Biden gets in, there may be a different outlook. We may see a little bit of risk on in the market. We may see stocks rally a little bit further.
We may see the risk on currencies or the risk currencies get stronger. The Dollar may even be a little bit softer because, as we’re seeing at the minute market seems to be pricing and a little bit of a Biden win, which is putting a little bit of the Dollar at a softer pace.
The way I look at this is we have our huge support level down here at 0.7. If the market does breach that then, obviously, we’re going to be looking for that downside. However, looking towards the upside of the market there is a nice sort of trend line resistance dropping through here where the price is at the moment.
I think if price breaks through that, close above that area, or even looking left close above these highs to the left-hand side, then we’re going to see some upside to the AUD/USD.
I think we’re going to see that nice breakout, a nice retest, and maybe even a position heading towards that 0.74 area, the highs of the year pretty much.
So it’d be going to be super, super interesting. You know, the RBA cut rates last night to 0.1 basis points from 0.25. Typically that would soften the Australian Dollar. However, it hasn’t priced, has remained a little bit buoyed.
It’s going to be super interesting to see what happens this evening. As well be super, super careful with any positions you’re looking to take, or you know, always look for those key-areas to trade from.
I think 0.7 is going to be the crucial factor in this market. And if 0.7 gets breached, we could see some further downside to AUD/USD.
If that risk on play comes into the mix and Biden and wins pretty comfortably, we could see some upside.
We have to also remember, just kind of had a bit of an in that armor, you know. Trump has already stated that he will contest the result of states if he feels like he was being frauded or any way or you know, he wants to contest that decision.
That could add a little bit of pressure on the risk currencies as well. We could see Dollar benefit from the fact of that.
Even if Biden does win, be careful that there may be a little bit of retribution from Trump, and he may contest, which could add some pressure.
But I think breaks above 0.7160 are going to be pretty positive for the Australian Dollar and could see some further upside into these sorts of key-areas up around that 0.74.
If Trump gets re-elected, then price breaking these lows here at 0.7 is going to be pretty key as well. Two major swing levels to be aware of.
I hope you’ve enjoyed the content this week. Trade safely, and I’ll speak to you soon.
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