AUDUSD strengthens past 0.6750, the highest level since September 13

  • AUDUSD recovers to a two-month high amid fresh selling around the dollar.
  • Less aggressive Fed rate hike expectations and risk appetite weigh on the dollar.
  • Sustained strength beyond the 100-day SMA supports prospects for further gains in the pair.

The AUDUSD receive new purchases on Tuesday and goes up to a maximum of two months during the first part of the European session. The pair breaks through the 0.6750 level in the past hour, confirming a bullish break of the 100-day SMA resistance.

The US dollar comes under fresh selling pressure and falls to its lowest level since mid-August, which in turn is seen as a key factor acting as a tailwind for the AUDUSD pair. The surprise drop in inflation in the US in October pushed up hopes of a smaller rate hike by the Federal Reserve. This is evidenced by declining US Treasury yields, which continue to weigh on the dollar.

Apart of this, the positive tone in risk appetite, as evidenced by a further rise in equity markets, is seen as another factor weighing on the safe-haven dollar and benefiting the risk-sensitive Aussie. Nevertheless, It remains to be seen if the AUDUSD is able to build on the strength or if momentum peters out at higher levels amid mixed signals from China..

Economic data released today showed that industrial production slowed down to 5.0% YoY in October from 6.3% previously. Also, Chinese retail sales unexpectedly fell 0.5% in October, which is the first drop since May. This, along with fears that China could impose new lockdowns in some cities, cloud optimism about an eventual easing of restrictive measures.

This, in turn, warrants caution before positioning for any further upside. Nevertheless, a sustained move past the technically significant 100-day SMA favors the bulls. Market participants are now expecting US macroeconomic data, with the Empire State Manufacturing Index and Producer Price Index (PPI), to provide some momentum at the start of the American session.

AUDUSD technical levels

AUD/USD

Overview
Last price today 0.6762
Today I change daily 0.0062
Today’s daily change in % 0.93
today’s daily opening 0.67
Trends
daily SMA20 0.6432
daily SMA50 0.65
daily SMA100 0.6702
daily SMA200 0.6956
levels
previous daily high 0.6724
previous daily low 0.6664
Previous Weekly High 0.6717
previous weekly low 0.6387
Previous Monthly High 0.6548
Previous monthly minimum 0.617
Daily Fibonacci of 38.2% 0.6686
Daily Fibonacci of 61.8% 0.6701
Daily Pivot Point S1 0.6668
Daily Pivot Point S2 0.6636
Daily Pivot Point S3 0.6608
Daily Pivot Point R1 0.6728
Daily Pivot Point R2 0.6756
Daily Pivot Point R3 0.6788

Source: Fx Street

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