AUD/USD is trading at the highs for the day around 0.7239
Markets aren’t exactly risk on at the moment but that’s not stopping the aussie from pushing forward against the rest of the major currencies bloc ahead of European markets open. Despite the lackadaisical sentiment in markets, there isn’t anything to suggest negative tones either so movement so far has been very much reliant upon flows and technicals.
Looking at AUD/USD, price has started to move higher earlier today after the downside move stalled around the 20 November lows. Buyers are now attempting to test the 100-hour MA (red line) once again after sellers regained near-term control in the pair during US trading yesterday.
With plenty of potential headlines still to come during the week that could sour risk sentiment, it’s hard to see markets get too excited about a risk on rally in the coming days. The key item on the agenda for risk this week is the Trump-Xi summit and that only hits on the weekend.
As mentioned yesterday, it’s hard to see AUD/USD rally too far, too fast considering that the September high @ 0.7315 remains a key resistance level to break above. Even yesterday’s daily close failed to hold above the 100-day MA (red line) which suggests that buyers are also lacking conviction to build on a move higher.
That’s suggestive that any rallies in the near-term by AUD/USD will remain short-lived as long as the risk of the Trump-Xi summit still looms. The key near-term technical levels above are good areas to lean on for fading said rallies. As for an upside break, the 0.7315 remains the line in the sand with the month’s high @ 0.7338 to serve as any confirmation of a break.