The Aussie advanced through 20SMA barrier (0.7098) that capped last week’s action and hit new recovery high at 0.7119 on Monday.
Weaker greenback on soft US data on Friday that also raised concerns about dovish stance of the US central bank on two-day policy meeting (Tue/Wed), helped recovery.
Bulls now eye 55SMA (0.7127) but require eventual close above 20SMA to confirm improved structure.
However, bulls may struggle to regain 55SMA barrier, as daily momentum remains weak and slow stochastic is reversing from overbought territory and overall picture is bearish. Also, widely expected dovish tone from Fed is expected to boost Australian dollar, but the currency may weaken against its US counterpart, on lower liquidity and yields that requires caution.
Return below 20SMA would weaken near-term tone, while extension and close below 10SMA (0.7067) would confirm reversal.
Res: 0.7119, 0.7127, 0.7159, 0.7199
Sup: 0.7097, 0.7078, 0.7067, 0.7041
