Bulls are consolidating after failure on initial attack at key barriers
The Australian dollar pulls back from new monthly high at 0.6561 hit in Asian trading on Monday, as bulls face headwinds and unable to clearly key barriers provided by falling 100DMA (currently at 0.6534) and 30 Apr high at 0.6569.
Sentiment remains positive on global gradual re-opening after lockdown that boost risk demand and keeps Aussie inflated.
Rising bullish momentum on daily chart supports scenario along with last Friday’s weekly close above important Fibo barrier at 0.6450 (61.8% of 0.7032/0.5509) as well as marginal close above 20WMA.
Bulls are expected to take a breather and re-position ahead of fresh push higher as daily stochastic is entering overbought zone.
Dips should be ideally contained at 0.6475/50 zone (converged 5/10DMA’s / broken Fibo 61.8%) to keep bulls intact for attempt through key obstacles and extension towards 200DMA (0.6670).
Caution on break below 20DMA (0.6418) and 4/7 Apr higher base (0.6372/78) that would signal double-top and risk stronger correction.
Res: 0.6534; 0.6569; 0.6612; 0.6672
Sup: 0.6501; 0.6475; 0.6450; 0.6418