AUD/USD Forecast: At Two-Month Highs And Bullish: 5/19/2020

• China announced tariffs on Australian goods as retaliation over coronavirus origins’ investigation.
• Australia will publish this Wednesday the Westpac Leading Index for April.
• AUD/USD holding on to gains and with room to keep advancing.

The AUD/USD pair surged to 0.6584, a level that was last seen on March 10. Commodity-linked currencies were the best performers against the greenback, despite the sour tone of equities. Even further, the Aussie rallied despite an early slump, triggered by news coming from China. The Asian giant imposed punitive tariffs of more than 80% on barley imports from Australia, and market talks suggest that the movement could extend to wine, seafood, and dairy. The move was a response to the Australian call for an investigation into the origin of the coronavirus.

The Reserve Bank of Australia released the Minutes of its latest meeting, which included no surprises. Policymakers are concerned about the unprecedented economic contraction triggered by the coronavirus pandemic, although they are also confident about the measures taken to bare with it. During the upcoming Asian session, the country will publish the Westpac Leading Index for April, previously at -0.85%.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair is trading near the mentioned high in the 0.6560 regions as the day comes to an end. The 4-hour chart shows that it continues to develop above all of its moving averages, with the 20 SMA crossing above the 100 SMA, both around 0.6480. Technical indicators continue to head higher near overbought readings, all of which maintain the risk skewed to the upside.

Support levels: 0.6530 0.6490 0.6455

Resistance levels: 0.6585 0.6610 0.6645

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