FxWirePro: AUD/USD gaps higher as US-China trade truce boosts demand for risk assets, eyes 200-DMA at 0.7417

AUD/USD chart on Trading View used for analysis

• AUD/USD opens with a bullish gap after US-China trade armistice over the weekend.
   
• US President Trump and his Chinese counterpart Xi reached a temporary trade ceasefire agreement at the G20 meeting over the weekend giving both sides “breathing space” to resolve their differences.
   
• While the temporary pause in the trade war has put a strong bid under the antipodeans, slight improvement in China Caixin manufacturing PMI for November adds support.
   
• Data released earlier today showed China Caixin PMI reading managed to beat expectations, printing at 50.2 versus the forecast 50.0 (last 50.1).
   
• However, the underlying figures were not very encouraging, with the sub-index for new export orders in November shrinking to 47.7, a decline from the previous month's 48.8.
   
• The pair has opened with a bullish gap and is trading at 0.7367 at the time of writing, after hitting 4-month highs at 0.7380.
   
• Technical studies are turning bullish and we see scope for test of 200-DMA at 0.7417. Breakout at 200-DMA could see gains till 0.77 (61.8% Fib). 

Support levels - 0.7304 (5-DMA), 0.7278 (110-EMA), 0.7226 (55-EMA)
Resistance levels - 0.7417 (200-DMA), 0.7447 (38.2% Fib), 0.7709 (61.8% Fib)

Recommendation: Good to go long on dips, SL: 0.73, TP: 0.7415/ 0.7450/ 0.7575

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