- AUD / USD extends the recovery from the one-month low.
- A downtrend line from October 9 is the immediate target for the bulls.
- The bears will look for a clear break below 0.7050 / 45 for new entries.
- Advances in the stimulus talks in the US favor the appetite for risk.
The AUD / USD pair has risen to fresh daily highs around the 0.7080 level at the start of the European session on Wednesday. The pair has recently broken above a downtrend line since Oct 14 and the 100 hourly SMA amid a bullish MACD. Considering the Australian dollar’s status as the top-yielding currency, recent optimism around the US stimulus package helps the bulls.
Therefore, a sustained move above the previous resistance line and the key moving average helps the AUD / USD bulls to target another downtrend line near 0.7100.
However, the 200 hourly SMA at 0.7135 could limit the further rise of the pair beyond the round level of 0.7100.
On the other hand, a break down below the previous resistance line, now at 0.7070, will target the immediate support line, currently around 0.7050.
Another challenge for the AUD / USD bears is an uptrend line from June, near 0.7045. A break below this level would open the doors for a further downside towards the round 0.7000 level.
AUD / USD 1 hour chart
Credits: Forex Street