FxWirePro: AUD/USD bounces off 55-EMA support, weakness only on break below

AUD/USD chart - Trading View 

Spot Analysis:

AUD/USD was trading 0.07% lower on the day at 0.7426 at around 09:30 GMT.

Session High/ Low: 0.7430/ 0.7390

Previous Week's High/ Low: 0.7536/ 0.7359

Previous Session's High/ Low: 0.7431/ 0.7384

Fundamental Overview:

Risk sentiment sour despite Japan announcing a broad stimulus measure to combat the virus-led economic hardship.

Fed-linked fears over tapering and rate hikes, as well as the indecision over the US central bank’s future move amid reshuffle keeps investors wary.

Multiple Fed policymakers are likely to leave from their positions, including Fed Chair Jerome Powell and the same triggers chatters over future monetary policy tightening as inflation pressure mounts.

Focus on US inflation data due Wednesday for impetus. Analysts expect consumer price at 5.8% year-on-year, supporting the Federal Reserve's intent to be patient with interest rate hikes.

Technical Analysis:

- AUD/USD has been making higher highs and lows since multi-month lows in August

- Price action is above cloud and has tested 200-DMA before moving back

- Pullback has held support at 55-EMA, scope for upside resumption

- 5-DMA has turned and RSI has edged above 50 mark and is biased North

Major Support and Resistance Levels:

Support - 0.7396 (55-EMA), Resistance - 0.7429 (21-EMA)

Summary: AUD/USD has bounced off 55-EMA with Doji on Friday's trade. Breakout above 21-EMA will see more upside.