AUD/USD buyers poised but price bias remains jammed between key levels

Technical Analysis

The aussie is holding up well so far this week


The near-term bias in AUD/USD turned from being more bearish to being more bullish since overnight trading and price is continuing to extend to the upside as a result. Although buyers are in near-term control, the coast isn’t clear yet for a run higher in the pair.

Currently, there is some resistance around 0.7130 with the 61.8 retracement level holding around said level but just above that there are more critical resistance levels in play.

AUD/USD D1 26-03

In the bigger picture, price is starting to look for a firm break above the downside wedge that has been forming so far this year. However, the 100-day MA (red line) @ 0.7157 will be a key level to watch out for in limiting any upside potential in the pair.

The positive news in the past week for AUD/USD buyers is that the Fed’s latest dot plots projection shows no rate hikes for 2019 as of now. With AUD/USD being mostly a yields story in the grand scheme of things, that will certainly be a welcome relief for the aussie.

That said, bond yields globally have been encountering a tough time as of late and we even saw Australia’s 10-year yields fall to a record low in trading yesterday; which isn’t really a good sign for the aussie, all things considered.

However, you can’t ignore what’s happening on the charts either so just be wary of a potential break to the upside should price be able to move above the 100-day MA. As for trading today, there are large expiries set to keep price action sandwiched between the 0.7100 handle and the 0.7150 level so that should work in sellers’ favour.

At 0.7100-10 levels, there is about A$847m worth of expiries rolling off while at 0.7146-50, there is about $A1.0bn worth of expiries rolling off. I would expect that to keep price action contained around current levels for today.

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