The Australian dollar hit five-week high on Monday as strong rally extends into fourth straight day and broke above 100DMA (0.6858), to crack daily cloud top (0.6879).
Bulls eye another strong barrier at 0.6894 (12 Sep high), with sustained break above 0.6879/94 pivots needed to confirm base at 0.6670 zone and expose next pivotal barrier at 0.6925 (Fibo 61.8% of 0.7082/0.6670).
The Aussie is boosted by positive tones from US/China trade negotiations that signal de-escalation of trade tensions and increase risk appetite.
Also, expectations for Fed rate cut on 30 Oct FOMC meeting and RBA likely to stay on hold on 5 Nov policy meeting, maintain bullish sentiment.
Daily techs maintain strong bullish momentum, with MA’s in positive setup and created several bull-crosses, adding to positive outlook.
Overbought stochastic warns that bulls may hesitate to clear 0.6879/94 pivots, with dips expected to provide better opportunities to re-enter bullish market, while holding above broken Fibo support at 0.6827 (38.2% 0.7082/0.6670).
Res: 0.6894, 0.6925, 0.6985, 0.7000
Sup: 0.6857, 0.6827, 0.6807, 0.6795
