AUD/USD: recovery rally stalled at 200-hour MA hurdle
- AUD/USD's recovery from the 32-month low of 0.7021 seems to have stalled at the 20-hour moving averaged lined up near 0.71.
- The upside in the AUD is likely being capped by the weakness in the Chinese yuan.
The 200-hour moving average (MA) of 0.7096 is the level to beat for the bulls. This is because the key moving average has proved a tough nut to crack since Friday's NY session.
At press time, the currency pair is trading at 0.7085. A break above the 200-hour MA would signal a continuation of the rally from the 32-month low of 0.7021 hit on Friday and could yield a rally to 0.7160 (Oct. 17 high).
However, a break above the 200-hour MA may remain elusive as the Chinese yuan is on the defensive. For instance, USD/CNH (off shore yuan) has bounced off the 5-day EMA and is currently reporting moderate gains at 0.6598. Further, the S&P 500 futures are down 0.17 percent.
Looking ahead, the AUD/USD could rise well above the 200-hour MA, if the global equities turn positive. A below-forecast US personal spending and core PCE figures could also put a bid under the AUD/USD.
AUD/USD Technical Levels
Resistance: 0.7096 (200-hour MA), 0.7160 (Oct. 17 high), 0.72 (psychological level)
Support: 0.7055 (Oct. 25 low), 0.7021 (Friday's low), 0.70 (psychological support)
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
