FxWirePro: AUD/USD breaks above 5-DMA, eyes 0.71 handle as Aussie supported by rally in Dalian iron ore prices

AUD/USD chart on Trading View used for analysis

• Aussie is extending gains on the day buoyed by spike in Dalian iron ore prices.
   
• Prices of iron ore – one of Australia's top exports – has hit a three-week high, putting a bid under the Aussie dollar.
   
• Chinese iron ore futures jumped about 3 percent on Tuesday to CNY 509.5 – the highest level since mid-September.
   
• Further, Australia's NAB business conditions and business confidence indices bettered estimates, likely to lend support to the Aussie.
   
• The NAB September business conditions index came in at 15, beating estimates of 9 by a big margin and business confidence printed at 6, also bettering the estimate of 5. 
   
• AUD/USD is extending upside for a 2nd straight session. The pair has broken above 5-DMA and is on track to test 0.71 handle.
   
• However, the major trend in the pair remains bearish and we do not see any sighs of major reversal.
   
• Minor rallies could be used as shorting opportunities. Breakout at 55-EMA will negate our bearish bias.

Support levels - 0.7041 (Oct 8 lows), 0.7020 (channel base), 0.6976 (88.6% Fib)

Resistance levels - 0.71 (78.6% Fib), 0.7171 (21-EMA), 0.7251 (55-EMA)

Recommendation: We will wait for an appropriate enrty to go short. 

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 31.4028 (Neutral), while Hourly USD Spot Index was at -41.2543 (Neutral) at 0545 GMT.

For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.