Bulls under control above 38.2% Fibo at 0.7320
- Bulls are looking to recover 0.7557 despite the risk impulse in the market.
- Trendline overshoot and 38.2% add to the upside filters.
- The bears can take charge if the pair slips below 0.7275.
The AUD/USD pair has seen a juggernaut rally over the past few trading sessions despite widespread risk impulse in the market. The middle finger moves north on the first tick of February. Now the pair is aiming to reclaim its October 28th high at 0.7557.
On a daily scale, AUD/USD broke above 0.7320, the 38.2% Fibonacci retracement, which is placed from the May 10 high at 0.7892 to the January 28 low at 0.6966. This indicates a bullish reversal after a strong downtrend. The pair also broke above the trend line placed from the May 10 high at 0.7892, adding to the upside reversal screens.
It should be noted that the pair made an indecisive tick on the surface of the trendline on Thursday. Usually, a formation of undecided ticks near a breakout of the trendline indicates the importance of the respective levels. On Friday, the major cleared the undecided mark to the upside after opening in Thursday’s value zone. This indicates active buyer participation and the pair will gain momentum quickly.
AUD/USD recaptured the 200 period exponential moving average at 0.7300 and broke above it, with bulls in full control.
The Relative Strength Index (RSI) (14) rose above 60.00 after hovering in the 40.00-60.00 range, indicating further recovery ahead.
Bulls have been established in the major and further upside will be seen once the pair breaches Friday’s high at 0.7363. A break of 0.7363 will send the pair towards the 50% and 61.8% Fibonacci retracement at 0.7430 and 0.7541 respectively.
On the contrary, bulls may lose confidence if the pair slips below Thursday’s low at 0.7275. This will take the pair towards the 100-EMA at 0.7227 and the 23.6% Fibonacci retracement at 0.7186.