AUD/USD holds just above the 200-hour moving average
A late surge in Chinese stocks is giving a boost to European equities and in turn is helping give the aussie a bit of a feel-good factor as the currency pares losses against the dollar. The range on the day remains narrow (21 pips) but we're now closer to the upside than we are to the downside.
Aside from the boost in sentiment, the aussie remains supported around the 0.7300 handle with the 200-hour MA (blue line) and the 38.2 retracement level @ 0.7298 coming into play. So far, buyers have leaned on those levels to keep the near-term bullish bias going since breaking above in late trading on Friday.
However, despite the hold we're yet to see any extension of a move to the upside. Looking at the daily chart:
After bouncing off support and option-related bids close to the 0.7200 handle (barrier options lie here still), price has continuously moved higher but is now closing in on resistance levels around 0.7320-30. The 9 May 2017 low @ 0.7329 will be the key one to watch - which also sits near the 50.0 retracement level @ 0.7328.
So, despite the recent upside momentum there remains more work to be done for buyers in order to change the still negative outlook in the longer time frame charts. The 1 June low @ 0.7373 will be the next resistance level to look out for followed by the 0.7400 handle.
Only if we break above the latter and the July highs would some serious questions be posed of a potential breakdown in the bearish momentum since the start of the year.
