AUD/USD Price Analysis: Pennant breakout, bullish crossover on 1H chart point to more gains
- AUD/USD jumps in sync with S&P 50 futures amid US stimulus hopes.
- The 1H chart confirms pennant breakout and bullish crossover.
- RSI firms up, holding well within the positive territory.
AUD/USD found fresh bids once again just above the 0.7700 level and staged an impressive bounce so far this Monday.
The resurgent demand for the aussie could be attributed to the improvement in the risk sentiment amid expectations that the US $1.9 trillion stimulus proposal will receive Bipartisan support in Congress.
The US dollar retreats across the board on the return of risk appetite while the S&P 500 futures rise 0.40%, further lending support to the higher-yielding AUD.
From a short-term technical perspective, the AUD bulls look to extend their control following a double booster shot received.
The spot confirmed a pennant breakout on the hourly sticks while the upside break got a further boost after the 100-hourly moving average (HMA) broke above the 200-HMA, charting a bullish crossover.
To the north, AUD/USD could challenge Friday’s high at 0.7770, above which the 0.7800 psychological level would be in play.
On the flip side, a breach of the 50-HMA at 0.7740, the critical cap around 0.7732 could be challenged. That area is the confluence of the 100 and 200-HMAs.
The convergence of the 21-HMA and the pattern resistance now support at 0.7721 could guard the further downside.
The Relative Strength Index (RSI) has turned south but holds well above the midline, backing the case for additional gains.
AUD/USD: Hourly chart
AUD/USD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
