- AUD/USD gathers pace for a sustained move above 0.7200.
- Risk-on mood amid China data and US stimulus push supports.
- Golden cross formed on the hourly chart, with bullish RSI.
AUD/USD continues to advance for the third straight session on Friday, backed by broad US dollar weakness amid the upbeat market mood and upbeat Chinese macro numbers.
The Chinese proxy, AUD, cheers a surprise jump in the Caixin Services PMI and growing the country’s tourism during the Golden week holiday. Meanwhile, broad US dollar selling offers support to the aussie pair, as investors remain hopeful of a likely US fiscal stimulus deal.
From a short-term technical perspective, the bullish run picked up pace after the spot confirmed a cup and handle breakout on the hourly chart early Friday.
The bullish breakout opens doors for a test of the pattern target measured at 0.7245. Although acceptance above 0.7200 is critical for the additional upside.
The hourly Relative Strength Index (RSI) points north while probing the overbought territory, allowing for more gains. The scope for the further upside is also backed by the golden cross formation confirmed in the last hour after the 50- Hourly Moving Average (HMA) pierced the 200-HMA from below.
Meanwhile, the bulls could find fresh demand at the cup and handle pattern neckline (orange line) at 0.7170 should the aussie see some profit-taking. At that level, the 21-HMA coincides.
The next downside target lies at the horizontal 100-HMA at 0.7156. Further south, critical support at 0.7152 needs to be taken out for the bears to regain near-term control. That level is the confluence of the 50 and 200-HMAs.
AUD/USD: Hourly chart