Overview and dynamics
Amid the disappointing non-farm payrolls data in the US published on Friday, as well as the RBA decision to keep interest rates in Australia unchanged at 1.75%, AUD/USD pair increased by 200 points in almost three days. The pair came close to the resistance level 0.7445 (23.6% Fibonacci level of the correction to the downward wave since July 2014).
Earlier, AUD/USD found support near the level 0.7200 (the lower limit of the upward channel on the weekly chart) amid the strong Australian GDP data for the first quarter.
Today, the pair broke the important resistance levels 0.7370 (EMA144), 0.7400 (EMA200 on the daily chart) and the positive growth dynamics is maintained.
Australian currency and the oil and gas sector of the Australian economy are also supported by the growing oil price.
Since early June AUD/USD pair managed to recover already half the losses of the previous month, when in early May, the RBA cut interest rates for the first time since June 2015.
OsMA and Stochastic on the daily and 4-hour charts recommend buying, on the monthly chart they are reversing for long positions.
In case of breaking the resistance level 0.7445 (23.6% Fibonacci level, EMA50 on the weekly chart) and consolidating above the level 0.7500, the price will go to the resistance levels 0.7545, 0.7600 and then within the upward channel on the daily chart with the upper limit near the level 0.8000.
Nevertheless, despite the dynamic upward correction, the Australian currency continues to be under the pressure of a few fundamental factors (see the article “Fundamental Analysis as of 07.06.2016”). And as long as the pair is below the level 0.7445, the downward dynamics is preserved. In the case of breakdown of support levels 0.7200, 0.7140 (May lows), the pair will go to the levels 0.7100, 0.6975, 0.6910.
Support levels: 0.7400, 0.7370, 0.7290, 0.7260, 0.7200, 0.7140, 0.7100, 0.7000
Resistance levels: 0.7445, 0.7500, 0.7545, 0.7600
Sell Stop 0.7360. Stop-Loss 0.7410. Take-Profit 0.7300, 0.7260, 0.7200, 0.7140, 0.7100, 0.7000
Buy according to the market. Stop-Loss 0.7390. Take-Profit 0.7500, 0.7545, 0.7600, 0.7720, 0.7820
Breakdown of the level 0.7445 is required
Indicators are reversing to long positions