- The AUD/USD pair resumed its upward path amid a correction in the US dollar index.
- The USD index recovered from its daily low of 101.54 as the delay in US debt ceiling issues impact the long-term US outlook.
- AUD/USD oscillates in an accumulation phase where stocks move from retail participants to institutional investors.
AUD/USD pair it resumed its upward path after a corrective move near 0.6750 in the Tokyo session. A solid recovery in the Australian asset is supported by a further correction in the US dollar index (DXY). The USD index recovered from its daily low at 101.54 as the delay in US debt ceiling issues has long-term implications. view of United States economy.
Meanwhile, headlines that US trade chief Tai will meet Chinese trade minister Wang Wentai in Detroit later in May are expected to keep the Australian dollar buoyant. A positive development in the meeting would bring prosperity to their business relations. It is worth noting that Australia is China’s leading trading partner and a healthy trade relationship between China and the US will also improve opportunities for Australia.
AUD/USD oscillates broadly in the Wyckoff accumulation phase, in which stocks move from retail participants to institutional investors. A break of the same results in wider bullish ticks and high volume.
The 10-period exponential moving average (EMA) at 0.6721 provides support for the Australian dollar bulls.
Also, the Relative Strength Index (RSI) (14) is trying to climb into the 60.00-80.00 range, as it would trigger upward momentum.
Taking above the round resistance at 0.6800 with confidence, Aussie bulls will firmly drive the asset higher towards the February 6 low at 0.6855 followed by the February 21 high at 0.6920.
In an alternative scenario, US dollar bulls will flex their muscles if the Australian asset falls below the March 15 low of 0.6590. If the same happens, it will expose the asset to a March 8 low at 0.6568 followed by a November 2, 2022 high around 0.6500.