AUD/USD touches a high of 0.7168 on the day
Risk-on flows continue to be dominant and the aussie may very well be set for a strong bullish breakout if this keeps up. The more anticipated chart will be AUD/JPY as it looks to break away from its range seen this year as highlighted here.
But for AUD/USD, buyers are also continuing to exert near-term control after defending the 200-hour MA (green line) in the drop seen yesterday. Price has now also climbed back above the 100-hour MA (purple line), indicating that the near-term bias is now more bullish.
The daily chart highlights resistance around 0.7160-70 for the time being but if we are on the cusp of a risk-on breakout then the 200-day MA @ 0.7194 will be the key level to watch out for in trading later today.
AUD/USD buyers have yet to break above that level since the drop seen in March 2018 so any break above that will be rather significant in terms of establishing a more bullish momentum, even if it just means a squeeze.
In this instance, expect plenty of stops to be taken out above 0.7200 if we do get there. But as mentioned earlier, baby steps. US earnings season kicks off today and over the next few sessions, things can easily turn around if we get disappointing results.
