AUD/USD Price Forecast: Faces rejection near 100-day SMA at 0.7050; bullish bias intact
The AUD/USD pair faces rejection near the 100-day Simple Moving Average (SMA) and retreats slightly after hitting a fresh high since June 17, around the 0.7050 level earlier this Monday.
The AUD/USD currency pair is expected to face rejection near its 100-day Simple Moving Average (SMA) at 0.7050, a level hit earlier this Monday. After reaching a fresh high since June 17, the pair retreated slightly to the 0.7030-0.7025 range heading into the European session. However, the downside potential appears limited due to a supportive fundamental and technical setup.
The US Dollar (USD) has shown a moderate recovery from a one-and-a-half-month low, which, combined with a disappointing China Manufacturing PMI and easing inflation fears, is helping limit the AUD/USD pair's downside. Technical analysis indicates that the breakout of the 0.7020 barrier, representing the 38.2% Fibonacci retracement level of the May-June decline, was a crucial trigger for AUD/USD bulls.
Momentum indicators, including the Relative Strength Index and Moving Average Convergence Divergence (MACD), are also supportive. A daily close above the 100-day SMA (0.7053) and the 50.0% retracement (0.7069) level could potentially open the way to the 61.8% retracement (0.7117) and further up to the cycle high around 0.7271. Conversely, a decline below 0.7021, coupled with support levels at 0.6962 and the 200-day SMA (0.6913), could expose the AUD/USD pair to further downside.
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