AUD/USD has recorded an impressive rally since March. What is the technical bias for the pair?
Here is their view, courtesy of eFXdata:
The Australian dollar’s speedy 25% ascent from its March low of 0.5510 is no bear market correction.
Rather, it has the makings of a new bull market following a near nine-year, 50% decline from its 1.1081 peak in 2011.
The extended drop that culminated in a “spike bottom” and a quick reversal on March 19 is typical of major changes in trend. Strong technical signals of a nascent bull market come from Friday’s daily close above the 200-DMA at 0.6658 and Monday’s acceleration above the 55-WMA at 0.6725 for the first time in two years.
The break above 0.6823, the 50% retracement of the 2018-20 drop from 0.8136 to 0.5510, and 0.6825, the 23.6% Fibo of the 2011-2020 drop from 1.1081 to 0.5510, strengthens this notion.
The momentum of the AUD rally suggests a weekly close above the 100-WMA currently at 0.6925 is likely after a period of consolidation.
A test of the Dec 31, 2019 high at 0.7032 and the 200-WMA at 0.7286 will then follow.
A weekly close above the 200-WMA confirms a bull market.
Corrective declines should now hold support at the previous resistance of 0.6658-85.
Only a drop below 0.6373-78, the lows in early May, will jeopardize the scope for a full-fledged AUD/USD bull market.
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