- Risk rebound is boding well for the Aussie dollar.
- S&P’s decision to raise Australia’s outlook to stable from negative is icing on the cake for AUD bulls.
- AUD/USD is closing on 0.7303 – a confluence of trendline hurdle and 50-day moving average (MA).
The AUD/USD could test and possibly break above key resistance at 0.7303, as the ratings agency S&P’s decision to raise Australia’s outlook to stable could bolster the already bullish sentiment in the AUD market.
The AUD picked up a strong bid on Tuesday, as China’s watered-down response to new US tariffs raised hopes that further escalation of trade war could be avoided.
At press time, the AUD/USD is trading at 0.7295, representing marginal gains on the day, having rallied in the last four trading days. Meanwhile, the trendline sloping downwards from January highs has met the 50-day moving average at 0.7303.
The risk assets like the AUD will likely remain bid in the near-term unless the Trump administration surprises markets by firing another shot in the trade war with China.
Add to that, the S&P’s upward revision of the outlook and the AUD/USD looks set to scale the confluence of trendline and 50-day MA at 0.7303. A UTC close above that level would signal the 9-month long bear market has ended.
AUD/USD Technical Levels
Resistance: 0.7303 (trendline hurdle + 50-day MA), 0.7382 (Aug. 21 high), 0.7395 (100-day MA)
Support: 0.7248 (5-day MA), 0.72 (psychological support), 0.7189 (200-hour MA)
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