Australian dollar remains at the front foot and continues to pressure strong barriers at 0.7050 zone (daily cloud base / Fibo 23.6% of 0.7277/0.6978) for the second consecutive day, but attempts to extend Thursday’s almost 1% advance, remain so far capped.
Strong bounce after repeated failure at 0.7000 support (psychological / Fibo 61.8% retracement of 0.6833/0.7277) started to lose traction under thick daily cloud which provides significant headwinds.
Near-term action is also weighed by predominantly bearish daily studies (strengthening negative momentum / 10/100 and 20/55DMA bear crosses) that challenges recovery attempts, although weekly Doji candle (after previous week’s large bearish candle) might signal developments of reversal pattern and fuel recovery.
Caution on repeated failure under cloud base that may deflate hopes for stronger advance, but also signal that traders reduce speed, ahead of RBA policy meeting next Tuesday (the central bank is expected to keep rates on hold at 4.35%, but may provide more details about their next steps in an environment of rising inflation and slower economic growth).
Res: 0.7050; 0.7083; 0.7108; 0.7129
Sup: 0.7021; 0.7000; 0.6978; 0.6938
