AUD/USD eases from two-month peak on modest USD strength, downside seems cushioned
The AUD/USD pair faces rejection near a technically significant 200-day SMA on Friday and witnessed a modest pullback from the vicinity of a two-month high touched the previous day. The pair, however, manages to bounce a few pips from the daily low and now seems to have stabilized around the 0.7100 round-figure mark.
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From a technical perspective, Friday's sharp intraday downfall stalled near a descending trend-line resistance breakpoint. The subsequent bounce and acceptance above the 50-day SMA favour bullish traders. Some follow-through buying beyond the 0.7000 psychological mark would reaffirm the positive outlook and pave the way for additional gains. The AUD/USD pair might then aim to surpass an intermediate hurdle near the 0.7060 region and aim to reclaim the 0.7100 mark. The momentum could lift spot prices beyond the 100-day SMA, around the 0.7115 area, towards testing the very important 200-day SMA, currently near the 0.7170 zone.
On the flip side, the 0.6940 horizontal level now seems to protect the immediate downside ahead of the 0.6910-0.6900 region. Some follow-through selling below the 0.6880-0.6875 support zone could make the AUD/USD pair vulnerable to challenging the 0.6800 round-figure mark. A convincing break below the latter would shift the bias in favour of bearish traders and expose the 0.6730 support. Spot prices could eventually drop to the 0.6700 mark en-route the YTD low, around the 0.6680 region set on July 14.
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