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Aug 07 - 05:55 AM

AUD/USD - COMMENT-AUD/USD May Prove Too Hot To Handle In August

By Martin Miller  —  Aug 07 - 03:50 AM

The AUD/USD chart is bullish, but factors such as August seasonality call into question the likelihood of further gains.

AUD/USD closed above the 0.7133 Fibonacci level in July, a 61.8% retracement of the 0.8136 to 0.5551 (2018 to 2020) drop, unmasking the 0.7516 Fibonacci level, 76.4% of the same decline.

However, AUD/USD's August performance since 2000 shows it has fallen in 15 of the past 20 years.
Seasonality should not be considered in isolation, but combined with other factors it can be a useful tool.

In times of uncertainty, funds usually flow out of the Australian dollar.
Australia's open and export-heavy economy is vulnerable to global trade tensions nL1N2F9037.

A plot of the AUD/USD daily returns since the start of 2020 shows the Australian dollar has been much more volatile compared with the USD index.
It also reveals AUD/USD has been susceptible some brutal daily collapses, meaning it is not an ideal candidate to shelter from the coronavirus pandemic's effects.
Related nL4N2F90QA

For more click on FXBUZ


Monthly Chart: Click here

Seasonality Monthly Chart Click here

FX 2020 Daily Returns Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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