Price still trades below key resistance levels
The aussie may be among the top gainers on the day but so far, AUD/USD has failed to really break any technical levels to warrant a change in sentiment as of yet. The rebound today comes as risk sentiment in markets improves and for AUD/USD, support near 0.7200 has helped with that as well.
However, price continues to trade below the 200-hour MA (blue line) and that means the near-term bias remains more bearish. As mentioned earlier, it’s going to take a really solid rally in risk (in my view, US equity futures has to lead the way) for major currencies to gain further against the dollar and so far, there hasn’t been any signs of that yet. But it’s still early days so let’s see.
Should price move higher later in the session, the 100-day MA (red line) will be key as well. That sits at 0.7253 currently. For buyers, they need to hold a break above that to break the stranglehold that sellers have currently on the pair.
But in the near-term, there’s also resistance to come from the 200-hour MA @ 0.7249 as mentioned above so that will also act as another key resistance level for buyers to break through.
I’m not entirely convinced by the rebound in risk here as I still see markets correcting as we close out the year. But let’s take things one at a time now. For the moment, AUD/USD still remains favourable to sellers unless those key levels give way and that shows where the risk-reward lies as we approach those key resistance levels.