Pullback needs to hold above key supports at 0.7033/00 zone to keep larger bulls in play
The Australian dollar stands at the back foot at the beginning of the week following Friday’s close in red after bulls stalled on approach to 200DMA (0.7090).
Stronger US dollar on renewed safe-haven bid on Middle East tensions and lowered bets on more radical action from Fed this month, keep the Aussie in defensive mode.
Fresh weakness pressures top of thick daily cloud (0.7033) violation of which would risk test of next pivotal supports at 0.7016/00 zone (Fibo 38.2% of 0.6910/0.7082 / 10/20DMA’s / psychological support).
South-heading momentum and stochastic support scenario, however, current easing will be seen as positioning of larger bulls off 0.6831 (18 June low) for renewed attack at 200DMA, while dips stay above 0.7000 handle.
Firm break below 0.7000 pivot would put bulls on hold for deeper correction and unmask supports at 0.6976 (Fibo 61.8%) and 0.6962 (bullish channel support line).
Res: 0.7047; 0.7062; 0.7090; 0.7117
Sup: 0.7016; 0.7000; 0.6976; 0.6962