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AUD/USD SITS AT 7-WEEK TOPS, COMFORTABLE ABOVE 0.7700 MARK AHEAD OF US DATA

•  Extends overnight bullish break through 200-DMA.

•  Technical studies point to additional gains. 

•  US economic data eyed for fresh impetus.

 

The AUD/USD pair's early European session dip was bought into near the 0.7700 handle, with bulls now challenging 7-week tops ahead of the US economic releases.

 

Dip buying interest emerged just ahead of the very important 200-day SMA and was being supported by a subdued action around the US Treasury bond yields, which tends to underpin demand for higher-yielding currencies - like the Aussie. 

 

Further gains, however, remained capped amid pre-holiday thinned trading conditions and a goodish pickup in the US Dollar demand, which was seen benefitting from a slump in the shared currency. 

 

Meanwhile, the price action now seems to reaffirm previous session's bullish breakout and hence, a follow through up-move, beyond early Nov. swing highs, now seems a distinct possibility.

 

Traders would now take cues from the US economic docket, featuring the release of personal income/spending figures for November, along with the Fed's preferred inflation gauge - core PCE price index, Durable Goods Orders, New Home Sales and the Michigan consumer sentiment index. 

 

Technical levels to watch

 

Immediate resistance remains near 0.7730 level (Nov. 2 high), above which the pair seems all set to dart towards 100-day SMA resistance near the 0.7785 region. On the flip side, the 0.7700-0.7695 region (200-DMA area) should continue to attract some buying interest, which if broken might prompt some additional profit-taking slide towards 0.7640 strong horizontal support.

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