Bulls remain in play but face headwinds from 200DMA
The Australian dollar is keeping traction after Wednesday’s 1.7% advance (the biggest one-day rally since Nov 10) sparked by the news that China would resume coal imports from Australia.
Strong rally on Wednesday came just ticks from Dec 13 three-month peak (0.6893) but bulls failed to sustain break above falling 200DMA (0.6847), which so far provides strong headwinds.
Technical studies on daily chart are overall bullish and support the action, along with Wednesday’s bullish engulfing pattern, but close above 200DMA is required to confirm bullish structure.
Bulls also need to clear pivotal barriers at 0.6871/93 (Fibo 38.2% of 0.8071/0.6170 / Dec 13 high) to signal continuation of recovery rally from 0.6170 (2022 low, posted on Oct 13).
Caution on repeated failure at 200DMA which would keep an action on hold, though bulls are expected to remain in play while above rising 10DMA (0.6768).
Res: 0.6847; 0.6871; 0.6893; 0.6956
Sup: 0.6800; 0.6768; 0.6747; 0.6716