- AUD / USD attracted some buying on the dips on Monday and updated daily highs in the past hour.
- A modest USD pullback extended some support to the pair amid risk appetite weather.
- Investors now await the RBA on Tuesday before the FOMC’s critical policy meeting.
The pair AUD/USD It showed resistance below the key psychological mark of 0.7500 and attracted some buying on the dips on the first day of a new week. The pair built on its steady intraday rise and climbed to fresh daily highs around the 0.7525 region during the early days of the American session.
The US dollar struggled to preserve its modest intraday gains, instead witnessing a modest pullback from the two-and-a-half-week highs. This, coupled with risk appetite, acted as a tailwind for the perceived riskier aussie and helped the AUD / USD pair find decent support near the 0.7485 region.
However, the rise appears limited as investors could refrain from aggressive bets in the face of major risks from central bank events this week. The Reserve Bank of Australia will announce its policy decision on Tuesday and set the tone ahead of the FOMC’s critical policy update on Wednesday.
Looking at the technical outlook, the recent strong positive movement observed over the past month stalled near the very important 20-day SMA. The aforementioned barrier, currently around the 0.7555 region, should now act as a key point and help determine the short-term trajectory.
Meanwhile, the technical indicators on the daily chart are comfortably in bullish territory and support the prospects for further gains. That said, it will still be prudent to wait for a sustained move past the 200 DMA before positioning for a further appreciation move for the AUD / USD pair.
The next relevant resistance is set near the July monthly swing highs around the 0.7600 round level, which if broken should pave the way to test the 0.7650-55 intermediate hurdle. The AUD / USD pair could further extend the momentum and aim to regain the 0.7700 level.
On the other hand, the 0.7485-80 region now appears to have emerged as strong immediate resistance. A convincing break below could trigger a long slide and accelerate the decline towards the 0.7400 level. The corrective pullback could extend further towards the 0.7325-20 static support.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.