AUD/USD daily chart
Buyers are looking to make six straight days of gains in AUD/USD, with the pair building on the push above its 200-day moving average (blue line) on Friday. Today’s rise also exceeds the 61.8 Fibonacci retracement level at 0.6536 and is opposite the 100-day moving average (red line) at 0.6584. So what’s next?
The key resistance level is now one to watch, with the dollar starting to look vulnerable elsewhere as well.
The balance of risks was not favorable to the dollar towards the end of last week and this has not changed. But with the Fed stepping in later this week, we’ll have to see what kind of message it plans to send to the markets.
The key resistance level above could still contain any upside for the week. And beyond that, we also have to manage the March and April highs around 0.6644-67.
The Aussie recorded a strong rebound, reversing most of April’s decline. However, with the gap now arguably narrowed on the Fed-RBA divergence, traders will have to look elsewhere to work next. The Fed will be one of the priorities to watch this week. That’s before attention begins to turn back to key US data, with Friday’s nonfarm payrolls report.
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