AUD/USD analysis: more gains likely above 0.7920

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7887

The AUD/USD pair recovered nicely these last few days, accelerating its advance on Friday amid broad dollar's weakness. The pair settled a few pips below the 0.7900 level and at its highest in two weeks, overcoming early weakness triggered by softer-than-expected Chinese trade figures, also helped by the RBA Financial Stability Report. The document indicated that, while the Central Bank is concerned about the developments of the housing sector, the 12-month outlook was the less pessimistic in over a year, trimming odds for rate cuts in the near future. China will release its September inflation figures at the beginning of the week, which will surely affect the Aussie, although macroeconomic definitions will come on Thursday, when Australia will release its September employment data and China will unveil Q3 GDP figures. In the meantime, the technical picture is bullish as the pair settled above the 38.2% retracement of its latest slump from 0.8098. In the daily chart, indicators maintain sharp bullish slopes, entering bullish territory straight from oversold readings while the price settled above an anyway bearish 20 DMA. In the 4 hours chart, the price accelerated sharply above a now bullish 20 SMA, while technical indicators regain their upward strength within overbought readings. The next Fibonacci resistance comes around 0.7920, with gains above it opening doors for a steeper recovery.

Support levels: 0.7870 0.7825 0.7790

Resistance levels: 0.7920 0.7960 0.7995

View Live Chart for the AUD/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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