AUD/USD analysis: positive momentum to extend short-term
|AUD/USD Current price: 0.7115
- Aussie boosted by positive US-China trade war news, soaring Wall Street.
- AUD/USD gains directly linked to global growth figures, particularly linked to China.
The AUD/USD pair closed the week with solid gains at 0.7115, posting an impressive come back from an almost one decade low of 0.6775. Friday's gains were triggered by positive news related to the US-China trade war, as both economies will resume talks this Monday in Beijing, alongside China's announcement of more stimulus measures coming from the banking sector. The strong US employment report boosted US equities, which also provided support to the Aussie. The extent of the recovery and whether the pair could continue advancing will depend on how trade-talks develop, and more relevant, upcoming Chinese macroeconomic figures, as more signs of economic slowdown, could well result in the pair losing again the 0.7000 threshold. Concerns about a global economic downturn will also play against the commodity-linked currency.
The recovery has been quite impressive, yet in the daily chart, the AUD/USD pair settled right around a bearish 20 DMA, which maintains its downward slope below the larger ones. Technical indicators in the mentioned chart have recovered from oversold readings, maintaining their upward slopes but within negative ground, leaning the risk to the upside without confirming additional gains just yet. Shorter term, and according to the 4 hours chart, the pair seems poised to extend its gains, having settled a couple of pips above its 100 SMA for the first time in a month, while technical indicators continue heading north despite being in overbought territory.
Support levels: 0.7080 0.7045 0.7010
Resistance levels: 0.7140 0.7175 0.7210
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