- Rising December Fed rate hike bets and devaluation of Yuan by PBOC weighing on AUD/USD.
- SDR inclusion has not helped strengthen the yuan, PBOC has been weakening the currency via lower daily fix.
- Technical indicators support upside in the pair, though some consolidation likely at 0.76 before next leg higher.
- We see strong support by trendline at 0.7520, weakness only on break below.
- Violation at 0.7520 could see test of 0.75 and then 0.7443 (200-DMA).
- On the flipside, decisive break above 20-DMA at 0.7614 could see gains upto 0.77 (trendline resistance).
- Break above 0.77 could accentuate bullish bias, we then see scope for test of 0.7835.
- Major support levels - 0.7576 (5-DMA), 0.7541 (100-DMA), 0.7520 (trendline), 0.7443 (200-DMA)
- Major resistance levels - 0.7604 (50-DMA), 0.7614 (20-DMA), 0.77 (trendline), 0.7760 (Aug 11 high)
Recommendation: Good to go long on close above 20-DMA at 0.7614, SL: 0.7540, TP: 0.77/ 0.7760
