FxWirePro: AUD/USD Upside Capped Below Daily Cloud, Some Consolidation Likely Before Next Move
- AUD/USD trades modestly flat on the day, likely to consolidate gains of the previous session.
- The pair spiked to hit fresh five-week highs of 0.7463 on Tuesday after RBA stood pat, but saw a corrective slide early today.
- Pair found fresh bids at lows near 0.7430 after positive Chinese imports and exports data.
- The Chinese imports data revealed a smaller than expected drop in the imports, which suggests Chinese domestic demand is slowly picking-up.
- RBA’s status-quo stance combined with higher oil prices underpins the sentiment around the AUD.
- On the charts we see stiff resistance by 50-DMA at 0.7468 and cloud base at 0.7472. Break above needed for further upside.
- Above 0.7472, the pair finds its next hurdle at 0.7488 (50% Fib of 0.7835 to 0.7145 fall) and then 0.7570 (61.8% Fib).
- Break below 0.74 can drag the pair to 0.7360 and then 0.73 levels.
- Next in focus remains the US labour data due later in the NA session ahead of the Chinese CPI data lined up for release tomorrow.
- We expect some consolidation at current levels. Our previous call (http://www.econotimes.com/FxWirePro-AUD-USD-breaks-above-200-DMA-good-to-buy-dips-217575) has achieved all targets.
Recommendation: Book full profits. Enter fresh longs on break above 0.7475, target 0.7570