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BUZZ-COMMENT:AUD/USD trending higher with a few cracks showing

Credit: REUTERS/DANIEL MUNOZ

The AUD/USD is trending higher but growing tensions between the United States and China, weakening economic data and possible delays to the second U.S. stimulus package threaten to stall the trend and weigh on risk assets in general.

The AUD/USD is trending higher but growing tensions between the United States and China, weakening economic data and possible delays to the second U.S. stimulus package threaten to stall the trend and weigh on risk assets in general.

The correlation between the AUD/USD and the S&P 500 has been strong since the start of the coronavirus pandemic in early March and a pause on Wall Street will likely lead to a correction lower in the AUD/USD. A break below 0.7090 in the AUD/USD will mark the second straight day of a lower low, indicating slowing momentum, A break below the 10-day moving average at 0.7040 will confirm a short-term top is in place at 0.7184.

Conversely, a break above Thursday's 0.7162 high will indicate upward momentum remains strong enough to usher in new highs above 0.7200.

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(John Noonan is a Reuters market analyst. The views expressed are his own)

((john.noonan@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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