AUDUSD is on the top list of the best performing pairs for 2020 despite the unforeseen Covid-19 dramatic economic impact, rallying 9.76% on a yearly basis to a fresh 2 ½-year high of 0.7707 in the last trading session of the year.
From a technical perspective, the short-term bias remains on the positive side as the price continues to build its uptrend comfortably above its upward-sloping simple moving averages (SMA) and the Ichimoku cloud. Moreover, the red Tenkan-sen line keeps strengthening above the blue Kijun-sen, while the MACD is resuming its positive momentum above its red signal line. The rising RSI is indicating further improvement for the market as well, though given its location in the overbought territory, some caution should be warranted.
Additional bullish actions above 0.7700 could initially stall around the 0.7780 barrier which was last active in the first half of 2018. Beyond that, there is no key obstacle in sight until the 0.7870 region.
On the downside, the red Tenkan-sen and the 20-day SMA currently at 0.7580 and 0.7540 respectively have been curbing negative movements over the past two months and could come to the rescue once again if the bears take control. A break below the previous peak of 0.7412 and the 50-day SMA underneath at 0.7360 could send a discouraging trend warning, shifting the positive outlook to neutral. Moving lower, the 0.7250 restrictive region could come next under the spotlight.
In brief, AUDUSD is exposed to additional improvement before the end of the turbulent year, with immediate resistance expected to occur around 0.7780.
Origin: XM
