The AUDUSD is above the 200 hour MA and looks toward the swing area
The AUDUSD has moved sharply higher as improving risk sentiment and hopes for diplomatic progress in the Middle East have helped fuel broader risk-on flows across the currency market. Commodity-linked currencies like the Australian dollar have benefited from the shift in sentiment, with traders moving away from safe-haven positioning and back toward higher-growth and higher-beta assets.
Technically, the pair spent time trading above and below its 200-hour moving average at 0.71608 earlier in the session, highlighting the importance of that level as a key barometer for both buyers and sellers. However, once buyers were able to firmly establish momentum above the 200-hour MA, the pair accelerated to the upside and moved comfortably away from the level. That break and hold above the 200-hour MA has shifted the near-term bias more firmly in favor of the buyers.
As long as the price remains above the 200-hour MA, buyers remain in full control from a technical perspective. The next upside target comes in near a swing area between 0.71936 and the natural resistance at 0.7200. That area could attract some profit-taking and short-term seller interest initially. However, if momentum can continue and buyers push above that ceiling, traders would next look toward another key swing zone between 0.7221 and 0.7227.
Beyond that, the market would start focusing on the highs from late April and May near 0.7277. A move toward those highs would further confirm the shift back toward a stronger bullish trend and likely require continued support from broader risk sentiment, stable equity markets, and softer US dollar flows.
From a risk-management perspective, the move away from the 200-hour MA now makes that level an even more important technical pivot. Buyers leaning against the bullish move can use the 200-hour MA as a close risk-defining level. A move back below it would neutralize some of the bullish momentum and suggest the upside breakout is losing traction.
If sellers are able to push the price below the 200-hour MA, traders would then turn their attention toward the rising 100-hour MA, currently near 0.7135. That moving average has been climbing steadily and represents another key support target. It would likely take a move below the 100-hour MA to tilt the near-term bias back in favor of the sellers and signal that the buyers are losing control of the broader short-term trend.
This article was written by Greg Michalowski at investinglive.com.