AUD/USD’s reversal from 0.7340 finds support at 0.7280 area
- AUD/USD fails to breach 0.7340 resistance and retreats below 0.7300.
- The aussie has lost momentum in a risk-off market.
- The near-term bias remains positive while above 0.7260.
The Australian dollar has failed to break beyond an important resistance area at 0.7340 for the second time this month. The following reversal, though. Has been contained right below 0.7300 and the near-term bias remains positive.
The aussie treads water as market sentiment falters
The risk-sensitive AUD has lost traction on Tuesday. Monday’s enthusiasm about the successful tests of Moderna’s COVID-19 vaccine has been offset by fears about the introduction of tighter restrictions as the numbers of infections and deaths continue escalating in the US and Europe.
The sour market mood has led to broad declines in equity markets. The major European Indexes have seen declines between 0.45% and 0.85% while in Wall Street the Dow Jones Index trades 0.45% lower, with the S&P Index 0.2% down and the Nasdaq Index trading practically flat.
AUD/USD remains biased higher while above 0.7260
From a technical point of view, the Aussie remains trading within a near-term upside trend while above trendline support from November 2 lows, now around 0.7260. A further reversal below here, might lead to a test of November 213 low art 0.7220 and then the 50 and 100-day SMAS’s at 07175 and 0.7150.
On the upside, the pair should break above 0.7340 (September 16, November 9 highs) to retest long-term highs at 0.7415. Once above there, the next area of relevance would be the July 2018 top at 0.7480.
Technical levels to watch