Join our community of traders FOR FREE!

  • Learn
  • Improve yourself
  • Get Rewards
Learn More

Forex Market: AUD/USD trades near three-week highs as Democrat Joe Biden takes a step closer to election victory

AUD/USD edged higher on Thursday, while trading not far from yesterday’s three-week high of 0.7222, as reports stated Democrat Joe Biden had moved a step closer to the White House in a knife-edge presidential election.

Still, however, investors were braced for uncertainty over the election outcome, after Republican incumbent President Donald Trump launched a multi-pronged attack on vote counts in a number of states, in pursuit of lawsuits and a recount.

Some analysts expect such prolonged legal battles to result in no decisive victory for weeks, likely weighing on the US Dollar in a short term.

Biden was reported to have won in key states such as Wisconsin and Michigan, while having a lead in Nevada and Arizona. At the same time, Donald Trump was leading in states such as Georgia and Pennsylvania.

“Until we have a clear win, and this may take until Friday, we should expect markets to be volatile… A contested outcome would drag this volatility for as long as we have a clear result,” Robeco analyst Fabiana Fedeli was quoted as saying by Reuters.

“In the short term, until uncertainty on the outcome continues, we can expect investors to turn more defensive and some of those “Blue sweep” trades…are likely to unravel.”

Market focus will also be on the outcome from the Federal Reserve’s two-day policy meeting at 19:00 GMT today, with the central bank largely expected to keep borrowing costs intact.

As of 9:24 GMT on Thursday AUD/USD was edging up 0.35% to trade at 0.7199, after earlier touching an intraday high of 0.7215, or a level not far from Wednesday’s three-week high of 0.7222. The major pair has risen 2.42% so far in November, after retreating 1.87% in October.

In terms of US macroeconomic data, today market players will be paying attention to the weekly report on jobless claims due out at 13:30 GMT.

Bond Yield Spread

The spread between 2-year Australian and 2-year US bond yields, which reflects the flow of funds in a short term, equaled -3.2 basis points (-0.032%) as of 7:15 GMT on Thursday, up from -4.4 basis points on November 4th.

Daily Pivot Levels (traditional method of calculation)

Central Pivot – 0.7148
R1 – 0.7248
R2 – 0.7322
R3 – 0.7422
R4 – 0.7522

S1 – 0.7074
S2 – 0.6975
S3 – 0.6901
S4 – 0.6827 is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

Related News