AUD/USD once again struggles in a bid to get and stay above 0.7100
Buyers can huff and puff all they want but as long as price fails to hold a firm break above 0.7100, I’m still not convinced of an extension higher in AUD/USD. If a nudge towards better risk sentiment isn’t going to help lead a bounce beyond 0.7100, then I’m not sure what else will at this point.
Yet again, aside from positioning data and risks of a short squeeze, there isn’t anything to suggest that the aussie will be able to get off the floor at this point if even improved risk sentiment won’t allow that to happen.
Price is now hugging the 200-hour MA (blue line) as buyers are pondering a more bullish near-term bias with the inability to stay above 0.7100. Looking at the situation, it’s going to take a massive turnaround in sentiment (risk or dollar negative for that matter) to drive a move higher in the pair.
But with equities looking more risk averse still, it’s hard to imagine any rallies getting too carried away or potentially getting shot in the foot just as it begins. That will keep any risk gains in-check until the dust settles at least.
That said, the theme there will continue the story for the aussie this year and that is ‘one step forward, two steps back’. The 0.7000 handle remains a key level to watch out for and that will be the major level in focus in due time as price action continues to struggle to get above 0.7100.