40 DAYS UNTIL THE US PRESIDENTIAL ELECTION
40 days to go until the 2020 presidential election and the incumbent President Donald Trump’s popularity is slowing rising despite a growing number of coronavirus cases. While his disapproval rating briefly peaked at a 3-year high at around 56.4 percent, it has since retreated as his popularity rating slowly edges higher from a one-year low of 40.2 to now 42.8 percent.

Coronavirus cases in the US currently stand at around 6.97 million with deaths approximating a little over 202k. The recent spike appears to be one of the factors roiling domestic equity markets as the specter of reimposed or extended lockdown measures haunts hopes of a stable recovery.

Policymakers in Washington are locking horns over how to craft another desperately-needed stimulus bill as the economic effects of the previous one fizzle out. Speaker of the House Nancy Pelosi said Democrats are ready for negotiations on a $2.4 trillion aid package which may pass as soon as next week in the House. The cost of intransigence is high, and sustained delays may further drag down stocks and risk-oriented currencies.

AUD/USD PRICE ANALYSIS
Since topping at the December 2019 swing-high at 0.7393, AUD/USD has retreated close to five percent and briefly tested former resistance-turned-support at 0.7018. What happens here may be critical. Breaking below that barrier with follow-through could signal to traders that underlying confidence in the pair’s upside potential is absent. As a result, bearish sentiment may begin to swell and further drive AUD/USD lower.

AUD/USD - Daily Chart
On the other hand, a bounce from 0.7018 could broadcast a sign of confidence to the extent that traders interpret the recovery as a sign that the pair is not quite ready to capitulate. In that scenario, AUD/USD may rise but its gains could be capped at a familiar but formidable resistance zone between 0.7181 and 0.7206.

Reference by: Dimitri Zabelin, Currency Analyst for DailyFX.com