Close above 20DMA needed to improve near-term outlook and expose key barriers
The Australian dollar remains constructive on Tuesday and probes again through falling 20DMA (0.6775), which capped the action in past four days.
Fresh attempts to extended Monday’s rally that emerged after strong downside rejection (0.6689) need clear break above 20DMA that would open way for test of key barriers at 0.6818 (tops of past three-week congestion) and 0.6831 (Fibo 38.2% of 0.7082/0.6670), violation of which would signal base and stronger recovery.
Daily stochastic is heading north but bullish momentum weakening and MA’s are in bearish configuration that may present strong obstacle for bulls.
Repeated failure to clear 20DMA would signal prolonged sideways mode, but the downside is expected to remain vulnerable.
Res: 0.6775; 0.6800; 0.6818; 0.6831
Sup: 0.6746; 0.6735; 0.6689; 0.6677