AUDUSD appears to be building confidence to revisit the region around the nearly 11-month high of 0.7064. The recent strengthening in the pair is reflected in the short-term oscillators and boosted by the recent bullish crossover of the 200-day simple moving average (SMA) by the ascending 50-day one.
The MACD, deep in the positive region, has climbed back over its red signal line, while the rising RSI heads gradually north towards the overbought boundary of 70.
Should positive sentiment strengthen further, initial resistance may stem from the region of 0.7064 – 0.7081, around 11-month highs. Overrunning this key border, the 0.7136 obstacle may deter the price from testing the 0.7206 high achieved on April 17. Additional gains may then stretch towards the 0.7283 barrier.
On the other hand, if sellers take the reins, initial friction may occur from the low of 0.6832 ahead of a critical support section from 0.6776 to 0.6749, which is reinforced by the 50-day SMA. Diving below this, the 0.6697 level and the 200-day SMA, slightly beneath at 0.6669, may attempt to terminate the decline. The former happens to be the 23.6% Fibonacci retracement of the up leg from the 17½-year low of 0.5506 to the 0.7064 high. Overcoming these tough support obstacles, the pair may target the 0.6566 barrier last seen around the end of May.
Summarizing, the short-term timeframe is strongly positive above 0.6776 and a move over the 0.7081 mark could shift the medium-to-long-term picture to a bullish one.
Origin: XM
