AUD/USD technical analysis: Set-up favours bullish traders, sustained move beyond 0.6900 awaited
- Remains confined in a broader trading range held over the past one week or so.
- The downside seems limited near 50-day SMA amid US-China trade optimism.
The AUD/USD pair edged higher through the early European session on Monday, albeit remained confined well within a one-week-old trading range around 50% Fibo. level of the 0.7082-0.6677 downfall.
However, the fact that the pair has found acceptance above 50-day SMA for the first time since late-July, the set-up seems tiled in favour of bullish traders and support prospects for a further near-term up-move.
Meanwhile, technical indicators on hourly/daily charts have been gaining positive traction and further add credence to the constructive set-up amid the recent encouraging US-China trade-related developments.
Hence, a sustained move beyond the 0.6900 handle should pave the way for an extension of the recent upward trajectory towards testing the next major barrier near the 0.6925-30 region - 61.8% Fibo. level.
On the flip side, 50-day SMA - around mid-0.6800s - now seems to protect the immediate downside and is closely followed by 38.2% Fibo. support near the 0.6830 region, which if broken might negate the positive outlook.
Weakness below the mentioned support, leading to a subsequent breakthrough the 0.6800 handle will indicate bullish exhaustion and set the stage for the resumption of the prior bearish trajectory.
AUD/USD daily chart