AUD/USD Buyers Hesitating at the 100 SMA
AUD/USD had been experiencing a bearish trend since July. However, there has been reversal in this trend that lasted for about two months after the pair fell below the 0.64 level, which had previously acted as a support level. During this reversal, buyers attempted to push the price above the 100 Simple Moving Average (SMA), as indicated by the green line on the H4 chart.
On Monday, the AUD/USD currency pair had its best day in two weeks. This positive performance was driven by a correction in the US Dollar’s value across various currency pairs and a rebound in commodity prices. As a result, the pair rose above the 0.6400 level and briefly exceeded the 100 Simple Moving Average (SMA), which is a technical indicator.
If the current positive investor sentiment continues, it could potentially lead to an extension of the rebound for the Australian Dollar (AUD). Positive sentiment can be influenced by factors such as improved economic outlooks, higher commodity prices (since Australia is a major commodity exporter), and a weakening US Dollar. While they managed to breach the 100 SMA once as the buyerds pushed the price to 0.6450 yesterday, it’s essential to note that there were no closing prices above this moving average. This inability to close above the 100 SMA suggests that the bullish momentum seems weak and it’s likely to be short-lived.
Additionally, there have been several doji/pin candlesticks during this period in AUD/USD . Doji candlesticks are characterized by their small bodies and signify indecision in the market which often serve as potential reversal signals, especially when they appear after a significant price move. In this case, since they are described as “bearish reversing signals,” it further supports the idea that buyers were struggling to maintain control, and the bearish sentiment might still be prevalent.
In terms of economic data releases from Australia, today, there are two noteworthy reports: the Westpac Consumer Confidence for September and the National Australia Bank’s Business Survey. These reports can provide insights into consumer and business sentiment in the country, which can impact currency markets. However, the most significant report for Australia this week will be the employment numbers scheduled for release on Thursday. Employment data often has a substantial impact on the Australian Dollar’s value, as it reflects the health of the labor market and can influence the Reserve Bank of Australia’s monetary policy decisions.
Australian Weekly ANZ Roy Morgan Consumer Confidence Survey
- ANZ Roy Morgan weekly consumer confidence 77.6 (prior 78.7)
- The recent upswing has hit a roadblock
- Confidence has now printed below 80pts for six months – the longest on record
AUD/USD Live Chart
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