Can buyers continue to run higher than yesterday?
Despite the decline in stocks during the session, the main currencies continue to face the weakness of the dollar and the yen as a key theme for most European morning trade.
The AUD / USD is still stabilizing, around the levels of 0.6540-50 currently, after having started the session a little closer to 0.6520 amid concerns about the tensions between Australia and China.
From a technical point of view, the pair are now starting to try to keep a break above their 100-day MA (red line) – a key line in the sand that has prevented gains in recent weeks.
This level is currently at 0.6508 and for buyers, staying above this level is now essential.
There is some upside resistance compared to recent highs @ 0.6561-70, but a move above that – especially on a daily break – should pave the way for a further upward move. MA at 200 days (blue line) @ 0.6664, another key resistance level in the pair.
For the moment, this is a risk flow and despite some caution in the equity sector, the AUD / USD buyers seem convinced that the dip buyers will intervene again later today.
Let’s see if that will be the case, as the S&P 500 is also nearing a test of its own key daily moving averages after yesterday exceeding the 61.8 retracement level.
Notice how the recovery in AUD / USD roughly reflects the S&P 500? 😉