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MTrading Team • 2024-05-16

AUDUSD bulls need validation from 0.6720 to keep the reins

AUDUSD bulls need validation from 0.6720 to keep the reins

AUDUSD bulls struggle to keep command at the highest level since January as a jump in the Aussie Unemployment Rate supersedes upbeat Employment Change data from the Pacific major and challenges the previous day’s run-up. That said, the risk-barometer pair marked the biggest daily rise in six months on Thursday after softer US inflation and Retail Sales numbers drowned the US Dollar. The Aussie pair’s upside also took clues from hopes about more stimulus from China.

Technically, the upbeat RSI (14) and the bullish MACD signals join the AUDUSD pair’s upside break of a four-month-old horizontal resistance, now immediate support near 0.6645-40, to keep the buyers hopeful. However, a downward-sloping resistance line from early February 2023, near 0.6720 by the press time, challenges the quote’s immediate upside. Following that, the pair’s quick run-up toward the yearly high of 0.6839 and then to the late 2023 peak surrounding 0.6870 can’t be ruled out.

Meanwhile, the March 2024 peak of near 0.6665 acts as immediate support for the pair traders to watch ahead of the aforementioned resistance-turned-support near 0.6645-40. It’s worth noting that a one-month-old rising support line of around 0.6610, quickly followed by the 0.6600 threshold, will act as the final defense of the AUDUSD buyers before giving control to the sellers.

Overall, the AUDUSD pair remains on the bull’s radar but the pair’s further upside hinges on a daily closing beyond 0.6720.

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