As Fed Chair Warsh’s testimony continues on Capitol Hill – and pos better-than-expected CPI data -the U.S. stocks are extending their gains. The NASDAQ is up about 204 points or 0.80%, while the S&P is currently up 0.37%. The stronger risk tone is also lifting risk-sensitive currencies, with the AUDUSD among the session’s leaders.
The AUDUSD climbed to a new session high of 0.6991 before easing slightly to trade near 0.6987. That rally tested the 38.2% retracement of the decline from the May 29 high at 0.6993, a level that also coincides with a swing area from mid-June. A sustained move above that resistance would shift the focus toward a descending trendline near 0.7011. Beyond that, the next key upside target is the 50% retracement of the May 29 decline at 0.7033.
On the downside, today’s rally broke above the former resistance zone between 0.6963 and 0.6977. That area now becomes an important support level. Holding above it would keep buyers in near-term control, while a move back below would be a disappointment for bulls and suggest the upside momentum is fading.
This article was written by Greg Michalowski at investinglive.com.