The AUD/USD currency pair recently pierced the 100-day Simple Moving Average (SMA) to the upside. This breakout is a hugely bullish sign for the forex market. This positive development has fueled optimistic expectations for de-escalation in the US-China trade war. This trade war has had a big impact on the direction of the Australian dollar because of its risk-sensitive nature. As the duo keeps luring new investors, market watchers are hopeful about the possibility for more upside.
In recent trading sessions, the AUD/USD pair showed bullish divergences oscillators in the daily chart, confirming its tendency to rise. The 0.6400-0.6390 zone is a formidable support area. The Asian session provided the bottom around that 0.6350-0.6345 zone, indicating the level of buyer support. The pair’s ability to reverse a significant portion of the previous day’s retracement slide from the year-to-date peak suggests resilience and a continuation of the bullish trend.
Market participants are constantly judging the market. They believe that the AUD/USD exchange rate will go up. At the moment, this 0.6425-0.6430 area is acting as a pivotal zone, coinciding with the 50% Fibonacci retracement level. Analysts believe that surpassing this zone could pave the way for further advancements toward the 200-day SMA, located near the 0.6470-0.6475 area.
Overall positive outlook for AUD/USD pair mirrors bigger picture stock market sentiments. Continued hope for a resolution of the US-Chinese trade stand-off is lifting the Aussie. The consensus sees the currency as a barometer of global risk appetite. For those involved in the forex market, geopolitical developments are closely scrutinized. Should they see evidence of a more positive trade picture, it would likely add considerable momentum to the pair.
The 0.6300 round number is an important level to watch for AUD/USD. It converges nicely with the 38.2% Fibonacci level, adding confluence to these corresponding support levels. This allows for some extra cushion against downward corrections while giving traders a chance to capitalize on any upside movements.
According to market analysts, the AUD/USD pair stands a greater chance of mounting a bullish case if it can recapture the 0.6500 psychological level. Now this momentum will be enough to spur even more buying pressure from investors. It’s the interaction between technical analysis and market psychology that will ultimately determine what the future holds for price action going forward.
Moving forward into week and trading week, analysts will certainly be looking at key technical indicators, as well as macroeconomic news, very cautiously. Continuing developments in US-China relations will be of continuing major importance. Any potential amendments have the potential to change risk appetite and thus play a role in shaping the AUD/USD pairs performance.