The next step in AUD/USD has to be a big leap forward

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AUD/USD daily chart

AUD/USD is looking to firm up a break above the 0.6500 mark this week and things are off to a good start so far. The pair is trading up another 0.3% today to 0.6575 but faces key resistance nearby in the form of the 200-day moving average (blue line) at 0.6589. That’s a big, big level on the charts and buyers will have to prove their mettle in breaking above that now.

If so, that will turn the more neutral bias in the pair right now to being more bullish instead. And that’s a big leap forward in cementing further upside momentum for the pair that will give the recent run higher more legs.

Thereafter, the 100-week moving average near 0.6800 will be the next key technical test before revisiting the June and July highs at 0.6895-00. In other words, there is scope for stronger gains if buyers are able to crack open the above key technical resistance at the moment.

For now, things are lining up to work in favour of the aussie at least. A stronger Chinese yuan, a softer dollar, and better risk sentiment are all positive factors for the currency and they at least look poised to continue in trading this week. So, if buyers are to go with an extended technical break from last week, there is plenty of reasons to choose from at least.