The AUD to USD (AUDUSD) is crawling back after falling by more than 2.38% in overnight trading. The pair is trading at 0.7120, which is higher than the session low of 0.7050.
The Australian dollar is mostly reacting to the election in the United States where counting is now going on. As of this writing, according to the Financial Times, Joe Biden leads by having 223 electoral college seats while Trump has 144. Still, with results from key battleground states yet to be released, the race is extremely tight.
Earlier today, we received relatively strong numbers from Australia. According to the Australian Industry Group (AIG), the construction index rose from 45.2 in September to 52.7 in October. While the construction sector is relatively small in Australia, it is an important indication of the state of the economy.
Another data from Markit showed that the country’s services PMI declined from 53.8 in September to 53.7 in October. It was the second consecutive month in a row that the reading has been above 50. This is an important number considering that the service sector represents the biggest portion of the Australian economy.
Also, the services sector in China continued to do well in October as the PMI rose to 56.8. Equally, this is an important metric considering that China is the most important country in the Australian economy.
On the four-hour chart, we see that the AUDUSD pair is at the middle of the support and resistance levels of 0.7000 and 0.7243. The price is also slightly above the 28-day and 14-day exponential moving averages. Notably, the Average True Range (ATR), which is an important gauge of volatility, has risen to the highest level in October.
Therefore, for now, I have a neutral view of the AUD to USD price because of how close the election is. As such, keep an eye on the support and resistance points of 0.7000 and 0.7243.
