AUD/USD Analysis: bullish case firmer above 0.7070
AUD/USD Current Price: 0.7058
- Chinese official Manufacturing and Non-Manufacturing PMI take center stage.
- Equities modest advance underpinned the Aussie at the beginning of the week.
The AUD/USD pair added 10 pips in thin trading at the beginning of the week, having spent the day at the upper half of Friday's range, instead of absent dollar's demand than Aussie's strength. Equities weren't helpful, as modest gains were seen in European and US indexes, offset, when it comes to lead the AUD, by falling oil prices. Australia didn't release relevant data at the beginning of the week but will publish this Tuesday, April's ANZ Business Confidence, seen worsening to -42.8 from -38.0 previously, and March Private Sector Credit. Also, China will release the official NBS Manufacturing PMI for April forecasted at 50.5, matching the previous reading, and the Non-Manufacturing PMI, seen at 54.5 vs. the previous 54.8. Chinese data lately has been slightly more encouraging than anticipated. That said, the market would probably react more to a negative outcome than to a positive one.
From a technical point of view, the short-term picture is bullish, as buyers surged on a test of the 23.6% retracement of the latest downward move at around 0.7035, while, in the 4 hours chart, the 20 SMA slowly grinds higher below the current level. Technical indicators in the mentioned chart remain within positive levels, the Momentum heading north at fresh highs and the RSI pretty much flat at around 51. The pair would need to extend its gains beyond the 38.2% retracement of the mentioned decline at around 0.707 to be able to extend its gains toward the 0.7100/10 price zone.
Support levels: 0.7035 0.7000 0.6965
Resistance levels: 0.7070 0.7105 0.7135
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
