It’s a case of data mismatch for the aussie and the greenback this week. The former saw stickier inflation numbers here while the latter saw softer PMI numbers here. That was enough to close the gap on the divergent outlook between the RBA and Fed. In turn, it helped AUD/USD to keep a solid bounce on the week. So, what is the chart saying now?
The pair initially saw its upside limited by the 200-day moving average (blue line) earlier this week. But today, that key level has been broken and buyers are even pushing price above the 61.8 Fib retracement level of the swing lower this month – seen at 0.6536. Keep above both those levels and the upside momentum will have legs to run further.
The next key technical resistance will only come in at the 100-day moving average (red line) at 0.6584 currently.
For trading though, just be wary that we still do have one big hurdle to go through. The US PCE price index is coming up later today. But the balance of risks might just favour a continuation of a softer dollar in this case. We’ll see.
This article was written by Justin Low at www.forexlive.com.
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