AUD/USD is higher on the day but gains are limited by the key level for now
After seizing near-term control on a break higher overnight, buyers worked their way above 0.6500 to currently pose a challenge to the 100-day MA (red line) @ 0.6541.
That will be the key level to watch out for in the sessions ahead, as I would expect there to be stops on a firm break above that and the 30 April high @ 0.6570.
So far, this has acted as a key resistance level to limit gains and it will be interesting to see how the extension of the risk rally will translate to aussie price action.
Upon a firm run above the 100-day MA, further resistance is only seen closer to the 200-day MA (blue line) @ 0.6674 and that will be an even bigger level to watch out for in the pair.
Break above that and the bias in the pair turns more bullish, potentially looking towards 0.7000 next should we see a continuation in the recent risk momentum to the upside.
For now, sellers are holding on as we see the pair trade around 0.6530 levels to start European morning trade. However, stocks are in a cheerful mood with US futures up by over 1% on the day currently and that is set to keep the aussie underpinned – for now at least.
If anything, keep an eye on the S&P 500 and the 61.8 retracement level @ 2,934.49.