Title: AUD/USD Technical Analysis: Breakout Above 100-Day MA Accelerates Bullish Momentum
Source: Original article by Greg Michalowski, ForexLive via TradingView
The Australian dollar (AUD) has rallied significantly against the US dollar (USD), with the AUD/USD currency pair breaking above its 100-day moving average for the first time in several weeks. This development, recently reported by Greg Michalowski of ForexLive, indicates growing bullish momentum and the potential for further upside movement. Investors and technical analysts are now watching key resistance and support levels as the pair charts new short-term highs.
This article explores the technical scenario surrounding the AUD/USD breakout above the 100-day moving average, detailing price action, key technical levels, market momentum, and broader macroeconomic context supporting the move.
Key Technical Move: Break Above the 100-Day Moving Average
On June 5, 2024, the AUD/USD pair decisively moved above its 100-day simple moving average (SMA), located around 0.6641. This breakout marks the first time the pair has traded above this key technical indicator since January 2024.
– The 100-day moving average is a widely followed trend indicator. A break above it is often viewed as a potential sign of trend reversal or strengthening momentum.
– The AUD/USD had previously remained capped by this level for several months as the US dollar maintained strength on the back of hawkish Federal Reserve monetary policy and broad market risk aversion.
– The close above this level indicates a transition from consolidation into an upward phase, supported by stronger buying interest.
According to Greg Michalowski’s analysis, the price pushed through the 100-day moving average earlier in the day and continued to build momentum, achieving a daily high of approximately 0.6693—well above the MA level.
Technical Outlook: Support and Resistance Levels
As the AUD/USD extends higher, traders are keeping a close eye on prominent price levels that could act as support during pullbacks or serve as near-term resistance zones.
Support levels:
– 100-day MA (around 0.6641): Now that the price has broken above this level, it may act as strong support on any subsequent downside retests.
– 200-hour moving average (~0.6610): A short-term technical level that provided interim support before the breakout.
– 0.6600 psychological level: A round-number support zone that may attract buyers on pullbacks.
Resistance levels:
– Daily high near 0.6693 (June 5): Immediate resistance capped gains during the latest intraday rally.
– 200-day MA (~0.6715): A long-term resistance level that could challenge the bulls if the upward move continues.
– April swing high at 0.6738: A significant resistance area, representing the previous multi-week high.
– 0.6800: Significant psychological barrier with potential to attract profit-taking orders and selling pressure.
Confirmation of Bullish Bias
The move higher through the 100-day MA is being interpreted by analysts as a confirmation of a growing bullish bias. Several technical and momentum indicators now point to more favorable odds for continued gains in the AUD/USD pair.
Supporting technical evidence includes:
– Higher lows forming on the 4-hour and daily charts, suggesting demand has been building at higher levels.
– RSI (Relative Strength Index) readings above 50 but below overbought territory (peaking near 60), signaling positive momentum without excessively stretched conditions.
– Bullish crossover of shorter EMAs (20-day and 50-day) indicating a strengthening short-term trend.
Fundamental Factors Supporting AUD Strength
In addition to the technical picture, fundamental developments have also played a role in supporting the Australian dollar’s recovery. A combination of weakening USD momentum and relatively resilient Australian economic data has helped shift sentiment in favor of the AUD.
Contributing factors include:
1. US Dollar Weakness
– Expectations for a pause or pivot in Federal Reserve policy have
Read more on USD/CAD trading.