AUD/USD chart on Trading View used for analysis
- AUD/USD extends gains into the European session, trades 0.23% at 0.7236 at the time of writing.
- Price action capped between 55 and 110 EMAs and breakout will provide clear direction.
- Momentum studies are bearish and MACD is showing a bearish crossover in support of downside.
- The pair is holding support at daily cloud, break below to see further weakness. We see little support till 0.7164 (Nov 13 low).
- Break below cloud base to see further drag. Scope then for test of 0.7021 (Oct 26 low).
- Focus on Fed speeches (Bostic, Evans, and George - are scheduled to speak today, Powell will take the center stage tomorrow) along with the Fed minutes on Thursday.
- Aussie dollar is closely following the action in the spread between the US 10-year treasury yield and its Australian counterpart.
- The yield differential may widen further if the Fed policymakers, scheduled to speak this week, call for above-neutral interest rates.
Support levels - 0.7211 (55-EMA and cloud top), 0.72 (Nov 21 low), 0.7140 (cloud base)
Resistance levels - 0.7241 (5-DMA), 0.7275 (110-EMA), 0.73
For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.