AUD/USD analysis: still bullish, despite rally seems overstretched

Valeria Bednarik FXStreet

AUD/USD Current price: 0.7499

The Australian dollar was among the best performers this past week, up against the greenback to 0.7518 and settling around 0.7500. The AUD/USD pair trimmed most of its December losses on the back of strong recovery in metals' prices, as Chinese Trade Balance figures showed imports continued rising in the world's second largest economy by the end of 2016, reassuring demand for the consumer country. Early Monday, the Australian Melbourne Institute will release the TD Securities inflation figures for December, which may fuel Aussie's advance on improved numbers. In the meantime, the daily chart shows that the latest daily is a bit overstretched, with technical indicators showing some signs of exhaustion in overbought territory, although without confirming an upcoming retracement. The pair has an immediate resistance at 0.7524, December's high, and further gains below the level will deny chances of a downward correction for the upcoming sessions. In the 4 hours chart, the 20 SMA maintains a sharp bullish slope below the current level, acting as dynamic support around 0.7450, also a major static support, whilst technical indicators are holding within overbought readings, with the Momentum indicator aiming modestly higher, indicating a limited downward scope at the time being.

Support: levels: 0.7450 0.7410 0.7365

Resistance levels: 0.7525 0.7560 0.7600

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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