Price closes in on a test of the 100-hour moving average
The greenback is a little softer across the board at the moment and that has seen most currencies rise against the dollar. Even the aussie, which has struggled earlier after ANZ and CBA raised their mortgage rates, has pared almost all of its losses against the dollar.
This will be a key test for buyers after having earlier made an attempt to move above the 100-hour MA (red line) but then news of the rise in mortgage rates hit. However, there’s still resistance to come from the swing region between 0.7210-20 as well so buyers will have to show more conviction in order to establish a move higher.
As mentioned many times, for AUD/USD to move higher it’s going to have to rely more on dollar weakness more than anything else. And right now the pair seems to be bottoming at the right time having tested key support levels in the swing region around 0.7145 to 0.7176:
Buyers will have a lot more work to do to establish any firm breaks back to the upside but holding onto support between 0.7145 to 0.7176 has been a good sign so far. With the dollar looking fragile and unsure across the other charts (EUR/USD, GBP/USD, USD/JPY), AUD/USD are looking to capitalise on the situation as well.
However, with fundamentals working against the aussie, it’d be best not to get too greedy on any move higher. And so far the trend has been one of lower lows and lower highs for AUD/USD since the start of the year, so until that momentum breaks there should not be a reason to change the strategy of having to sell rallies in the pair.