The AUD has had a tumultuous couple of week as the currency has battled against a highly bearish trend line. However, the AUD might finally be turning the corner as the currency recently broke through and held steady after a retest of the bearish trend.
Last Friday was an important day for the embattled pair as price action moved sharply above the long term bearish trend line. However, the real litmus test was whether the move could survive a retest of the bearish trend. That retest came early Monday morning and, thankfully, the pair managed to remain buoyant and gold above the bearish trend.
Subsequently, traders are now keenly eyeing resistance levels around the 0.7235 level for signs of a short term bullish push. This contention is actually supported the RSI oscillator which has started trending higher from within neutral territory. Along with the bullish RSI, the moving averages are also heading higher with the 12 and 30 EMA’s having turned steadily north.
The reality is that the pair will need to surmount the 0.7235 level to cement a move higher with targets around the 0.7362 level. However, the signs are encouraging given the swing in sentiment away from the US Dollar of late. The Australian Dollar has been a net beneficiary of that swing and the coming days could certainly prove buoyant for the pair.
However, a slew of US economic data pointsare looming upon the horizon this week that could certainly impact the pair. Keep a close watch on the upcoming US Unemployment Claims result as any strength could see the AUD sold back below the trend line.
Risk Warning: Any form of trading or investment carries a high level of risk to your capital and you should only trade with money you can afford to lose. The information and strategies contained herein may not be suitable for all investors, so please ensure that you fully understand the risks involved and you are advised to seek independent advice from a registered financial advisor. The advice on this website is general in nature and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. The information in this article is not intended for residents of New Zealand and use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Knight Review is not a registered financial advisor and in no way intends to provide specific advice to you in any form whatsoever and provide no financial products or services for sale. As always, please take the time to consult with a registered financial advisor in your jurisdiction for a consideration of your specific circumstances.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.