Australian dollar keeps firm tone and extends last week’s 2.1% advance, hitting a three-week high in early Monday.
Weaker US dollar on growing expectations that Fed’s tightening cycle might be over, lifted the Aussie dollar, while solid data on Monday showed robust Australian business conditions, adding to bullish stance.
Fresh bullish acceleration pushed the price action towards the top of a multi-week range, to pressure pivotal barriers at 0.6790/0.6805 (Fibo 38.2% of 0.7157/0.6563 bear-leg /100DMA / Apr 14 high), break of which is needed to signal a double-bottom (0.6563/73) and reversal and open way for stronger retracement of 0.7157/0.6563 fall.
Last Friday’s close above 200DMA (0.6726) and weekly bullish engulfing, generated bullish signals which look for a confirmation on sustained break of 0.6790/0.6805 barriers.
This would expose targets at 0.6860/0.6930 (daily Ichimoku cloud top/50%/61.8% retracement of 0.7157/0.6563 respectively) and unmask psychological 0.70 barrier on violation of these resistances.
Daily studies are turning to full bullish setup, though overbought stochastic provides headwinds and may pause bulls for consolidation before final push through 0.6790/0.6805 pivots.
Dips should find firm ground above broken 200DMA to keep bullish bias and offer better buying opportunities.
Caution on return and close below the base of thick daily cloud (0.6692) which would signal recovery stall and sideline bulls.
Res: 0.6805; 0.6860; 0.6930; 0.7000.
Sup: 0.6739; 0.6726; 0.6692; 0.6666.
