Can buyers keep the run higher from yesterday going?

AUD/USD D1 19-05

Despite stocks pulling back on the session, major currencies are still sticking with dollar and yen weakness as the key theme for the most part in European morning trade.

AUD/USD is still settling higher, around 0.6540-50 levels currently, after having started the session a little lower closer to 0.6520 amid concerns about Australia-China tensions.

From a technical standpoint, the pair is now starting to try and keep a break above its 100-day MA (red line) - a key line in the sand that has prevented gains over the past few weeks.

That level currently rests @ 0.6508 and for buyers, staying above that is pivotal now.

There is some upside resistance from the recent highs @ 0.6561-70 but a move above that - especially on a daily break - should pave the way for a further upside move towards the 200-day MA (blue line) @ 0.6664, another key resistance level in the pair.

For now, it is all about risk flows and despite some caution heeded in the equities space, AUD/USD buyers appear convinced that dip buyers will step in once again later today.

Let's see if that will be the case as the S&P 500 is also approaching a test of its own key daily moving averages after breaking above the 61.8 retracement level yesterday.


With the AUD/USD recovery pretty much mirroring the S&P 500 move as well, the break of the latter may very well to a stronger break higher in the former as well.