FxWirePro: AUD/USD breaks above 110-EMA, test of 200-DMA likely

AUD/USD chart on Trading View used for analysis

• AUD/USD extends previous session's gains, trades 0.22% higher at 0.7320.
   
• Australia’s Q3 capex spending edged lower, down 0.5%. The outcome was weaker than expected market median for +1.0%.
   
• That said, there was an upside surprise with the plans for capex spending in 2018/19 having a positive upward revision than three months earlier.
   
• On the otherside, dollar weakens across the board after Fed Chair Powell's dovish comments on the policy outlook.
   
• Powell said that the policy rate was 'just below' their estimates of neutral and added that they were not on a pre-set policy rate path and they were paying very close attention to the data.
   
• "The Fed balancing risks of shortening expansion, on one hand, higher inflation and instability on the other," Powell stated.
   
• Technical analysis is still biased higher. Scope for test of 200-DMA at 0.7422.
   
• On the flipside, retrace below 110-EMA could see dip till daily cloud. Break below cloud negates bullish bias.

Support levels - 0.7276 (110-EMA), 0.7258 (5-DMA), 0.7211 (cloud top)

Resistance levels - 0.74, 0.7422 (200-DMA)

Recommendation: Good to go long on dips. SL: 0.7270, TP: 0.74/ 0.7420

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.