Technical Analysis – AUDUSD hits fresh 2-week high; surpasses the 0.75 handle

Posted on June 6, 2017 at 1:44 pm GMT Andreas Georgiou, XM Investment Research Desk

AUDUSD is currently up from the day’s open, rising above the 50-day moving average (MA) and setting a new two-week high of 0.7515.

The short-term picture as depicted by the RSI is looking bullish as the indicator is above its 50 neutral-perceived level at 57. Note though that the indicator is not as steeply sloped as in the preceding trading days, perhaps indicating that momentum is not as strong as before.

The upper Bollinger band at 0.7517, coinciding with the May 23 one-month high, could provide some resistance to up movements in price. The 200-day MA, currently at 0.7528, might act as another barrier to the upside should the price continue moving higher.

On the downside, the 50-day MA at 0.7487 which was violated earlier in the day, could offer intra-day support. Below this level, a notable mark that could potentially act as support is the middle Bollinger line (a 20-day MA) at 0.7437. Further down, additional support could come from the 0.74 handle and the three-week low of 0.7371 from June 2.

Turning to the medium-term picture, the pair recorded a bearish cross in late May when the 50-day MA moved below the 200-day MA. This is generally perceived as a medium term negative signal. However, it is too early to conclude in that direction, especially taking into account of the movement over the last three trading days and the crossing above the 50-day MA today. In aggregate, the medium-term outlook is looking neutral at the moment.

Overall, the short-term bias is bullish and the medium-term is neutral.

Source: www.xm.com