AUD/USD: A gap up of 30+ pips as surprise Aussie election result please bulls

The AUD/USD pair opened with a gap of more than 30 pips from Friday’s close to currently trade around 0.6990 at the start of the Asian session on Monday. 

The Aussie pair reacted positively to the surprise re-election of Scott Morrison despite opposition Labor Party’s ambitious policy agenda.

During the weekend’s general election at Australia, the incumbent Liberal Party Of Australia, has been re-elected.

However, the final results are yet to roll out which will confirm whether Liberals will form a majority party in the parliament or need to take the support of various minority parties in order to hold the power. The Liberals so far has 74 seats, 2 short of 76 required for a majority.

Elsewhere, the US-China trade talks are on the sour ride but Reserve Bank of Australia’s (RBA) latest surprise with no rate cut has little role to remember now.

Global risk sentiment also remained mostly unchanged as signaled by the US 10-year treasury yield which flashes 2.39% figure.

There seems no major data/event scheduled for release during the day but the Federal Reserve Chairman Jerome Powell’s speech at the Financial Markets Conference, in Florida, will be closely watched for fresh impulse.

Technical Analysis

Unless clearing a downward sloping trend-line since mid-April, at 0.6960, chances of the AUD/USD’s pullback to 0.6880 and then to a recent low around 0.6860 can’t be denied. However, quote’s further downturn could be stopped by oversold levels of 14-day relative strength index (RSI) near January 2016 lows adjacent to 0.6830.

In a case where prices rally past 0.6960 trend-line resistance, 0.7000, 0.7030 and 0.7055 can please the buyers.