AUD/USD: Bulls dominate near fortnight top, 50-DMA

Extending its week-long upward trajectory, the AUD/USD pair is trading near a fortnight top while quoting 0.6966 amid the early Asian session on Tuesday.  |  24/06/2019 23:27
  • Greenback declines, comments from RBA’s Lowe help the Aussie pair to remain strong near the 2-week top.
  • Trade developments, RBA’s Bullocks will be followed for fresh impulse.

Extending its week-long upward trajectory, the AUD/USD pair is trading near a fortnight top while quoting 0.6966 amid the early Asian session on Tuesday.

In addition to the general US Dollar (USD) weakness, comments by the Reserve Bank of Australia’s (RBA) Governor Phillip Lowe that monetary policy easing is unlikely to be as effective as in the past also played its role to portray the Aussie pair as the best G10 performer on Monday.

The US and China continue to flash mixed signal considering their leaders’ trade meet at the upcoming G20. However, the break of the negotiation deadlock is something that becomes a surety.

Market risk sentiment tilts downwards amid fears of global pessimism requiring excess monetary easing from major central banks. The US 10-year treasury yield, a macro indicator for risk tone, lost nearly 3 basis points during the week while clocking in 2.018% by the day’s start.

The economic calendar remains light with RBA’s Assistant Governor (Financial System) Michele Bullock’s speech likely being an immediate catalyst ahead of the US Consumer Confidence and New Home Sales data. During the end part of the day, the US Federal Reserve Chairman Jerome Powell is also scheduled for a speech from the Council on Foreign Relations, in New York. 

Investors will keep looking for signs of policy easing from the RBA and the Federal Reserve members whereas second-tier data could offer intermediate directions.

Technical Analysis

Failure to cross the 50-day simple moving average (SMA) during early-month rally highlights the importance of 0.6970 figure, a break of which can further propel the quote towards current month high near 0.7022 ahead of diverting the bulls toward 0.7040 number comprising 100-day SMA.

Meanwhile, May 27 high around 0.6940, followed by 0.6900 and 0.6860 are likely nearby supports to watch during the pair’s U-turn whereas the month’s bottom surrounding 0.6830 may gain bears’ attention then after.

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