Aussie ticks higher on improved risk sentiment but the downside remains vulnerable
The Aussie stands at the front foot on Friday following double rejection at daily cloud base / 10SMA (0.7050/64), but the upside remains limited by cloud top /20SMA (0.7096/98) for now.
Improved risk sentiment on US/China trade talk progress inflated the Australian dollar, but doubts persist as initial Trump/Xi summit has been delayed.
Also signals of slowdown of Australian economy and increasing possibilities of rate cut, continue to weigh.
Daily techs remain bearishly aligned as bearish momentum continues rise, stochastic is reversing from overbought territory and MA’s are in bearish setup that keeps the downside vulnerable.
Eventual close below 10SMA / cloud base would generate negative signal which could be boosted on extension below 0.7041/39 (Thursday’s spike low / Fibo 61.8% of 0.7002/0.7097 recovery leg and risk retest of key 0.70 support.
Res: 0.7096; 0.7106; 0.7126; 0.7159
Sup: 0.7050; 0.7039; 0.7025; 0.7000