- AUD/USD gains traction for the fourth day in a row and rises to a more than a month high.
- Sustained strength above the 100-day SMA supports prospects for further gains.
- A convincing break below the 0.6600 level is needed to nullify the positive outlook.
AUD/USD is trading higher for a fourth day in a row on Tuesday, also marking the eighth day of positive movement in the previous nine, and hit more than a month highs during the early part of the European session. The pair is currently trading near the 0.6770-0.6775 zone, up almost 0.35% on the day, and looks set to extend its recent recovery from the yearly low reached on May 31.
Firm expectations that the Federal Reserve (Fed) will not raise interest rates in June triggered a further decline in US Treasury yields and put some downward pressure on the US dollar (USD). . Apart from this, the positive tone in the stock markets weakens the safe-haven USD further. This, coupled with last week’s surprise 25 basis point rate hike by the Reserve Bank of Australia (RBA) and a more hawkish policy statement, continues to lift the risk-sensitive AUD and act as wind. tail for the AUD/USD pair.
From a technical point of view, the previous day’s close above the 100-day SMA was seen as a new trigger for the bulls. The subsequent move higher on Tuesday validates the constructive setup which, together with the positive oscillators on the daily chart, support the prospects for further appreciation in the near term. Therefore, the rally is likely to break above the 0.6800 level and test the May monthly high around the 0.6815-0.6820 zone, ahead of the release of US consumer inflation figures. .
On the other hand, the 100-day SMA, currently around the 0.6735-0.6730 zone, seems to act as immediate support ahead of the 0.6700 level. It is closely followed by the important 200-day SMA, currently around the 0.6680 zone, which if broken could trigger some technical selling and leave the AUD/USD pair vulnerable. The pair could then accelerate the decline below the 0.6645 intermediate support to retest the 0.6600 level. A convincing break below this last level would flip the bias in favor of the bears.
AUD/USD daily chart
AUD/USD additional technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
