Morning Market Update – AUD/USD
AUD/USD‘s rally was reversed once the higher to 0.8001 was met and the pair declined towards 0.7870. Intraday bias remains on the upside at this point.
Firm support of 0.7870 confirms resumption of a whole rebound from the bottom. In such case, AUD/USD would target projection of 0.79436 to at 0.7965 next. But near term outlook will stay cautiously bullish as long as the support holds.
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Looking at the bigger picture, current development suggests that a rebound from 0.7870 is developing into a medium term rise. There is no confirmation of trend reversal yet and we’ll continue to treat such rebound as a corrective pattern. But in any case, a rise is now expected even further at 0.7943. A break of 0.7886 support has confirmed the completion of the rebound. Otherwise, further rise is now in favor.
The recent high on the Aussie has been suggesting that the pair has found support. A huge accelerating bull run has seen the market burst through the high of 0.7885 to what now looks to be a huge breakout above the high. The market has been limited by the resistance band 0.7941 of the 100SMA on numerous occasions in the past sessions, but the weakness of the dollar has driven a breakout. Chasing the Aussie higher here, however, would be a move filled with significant gains.
The bears were looking tired before the sharp gains of today, but again the move looks stretched and a close back inside the support would now be a corrective signal. Also the oscillator was close to crossing back above 35 before today’s gains. A move back above 35 on the daily oscillator would now be a corrective signal that a closing level back inside the band would now be a profit taking signal. The four-hourly chart support is around the 0.7870 level.
The AUDUSD pair leaned on the bullish channel’s support line that appears on four-hour chart and resumes its positive trading by today’s opening, which supports the continuation of the expected bullish trend on the intraday and short term basis, with its next target located at 0.79413.
Therefore, we are waiting for more rise in the upcoming sessions but shall watch out for the EMA50, taking into consideration that holding above 0.7886 represents key condition to continue the expected rise for today.
Expected trading range for today is between 0.7870 support and 0.79413 resistance.
Expected trend for today: Bullish
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