- AUD/USD holds on to gains as we head into the European session, hovers around 5-DMA at 0.7711.
- The pair is holding above strong trendline support at 0.7685, we see weakness only on break below.
- Technical indicators are bearish, however, bullish divergence on RSI and Stochs raises scope for upside.
- Immediate resistance is seen at 20-DMA at 0.7775, break above could see further upside.
- Scope then for test of 200-DMA at 0.7806. Further upside only on break above.
- On the flipside, we see weakness only on break below major trendline support at 0.7685.
- Focus now on Fedspeaks from Quarles, Dudley and Mester for fresh policy insights which could influence price action.
Support levels - 0.7712 (5-DMA), 0.77, 0.7685 (trendline)
Resistance levels - 0.7775 (20-DMA), 0.7806 (200-DMA)
Recommendation: We prefer to wait for clear directional bias.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -92.2138 (Bearish), while Hourly USD Spot Index was at -86.3722 (Bearish) at 0530 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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