AUD/USD: Buyers aim for 50-day SMA amid risk-on sentiment
- Upbeat comments from RBA’s Ellis and Brexit developments join hands with the positive news from the US-China trade front.
- 0.7130 level of 50-day SMA becomes the buyer’s favorite ahead of aiming for 100-day SMA.
The Australian Dollar (AUD) is on bids around the intra-day high of 0.7120 versus the US Dollar (USD) during early Tuesday. The pair recently recovered as upbeat comments from the RBA’s assistant governor joined hands with overall market risk-on sentiment after positive news from Brexit. Trades may now concentrate on the US housing and consumer confidence numbers for fresh impulse.
The AUD/USD pair witnessed gains on Monday as worries concerning the US recession (due to Friday’s yield inversion news report) and the positive developments surrounding the US-China trade deal pleased Aussie buyers.
The upside momentum carried overnight after the Reserve Bank of Australia’s (RBA) Assistant Governor (Economic) Luci Ellis praised the strength of domestic labor market and expected drags on income to fade soon during her appearance at the housing industry association.
Adding strength to the buying was voting on various Brexit amendments at the UK parliament. British members of parliament (MPs) voted in favor of an amendment seeking the House of Commons take control over the Brexit from the government while turning down amendment favoring the votes on no-deal Brexit ahead of one week from deadline.
Comments from the Eric Rosengren President of the Federal Reserve Bank of Boston supporting Fed’s balance sheet expansion and more short-term bonds also entertained Aussie optimists.
Next up in the traders’ radar will be February month housing market numbers from the US coupled with confederation board’s consumer confidence gauge. The US housing starts may soften to 1.215 million over the 1.230 million prior whereas the building permits may also decline to 1.300 million from 1.317 million revised earlier. The housing price index for January may remain unchanged while consumer confidence survey registered 131.4 figure during the previous month.
AUD/USD Technical Analysis
50-day simple moving average (SMA) level near 0.7130 gains immediate attention of the Aussie buyers ahead of diverting the bulls toward 0.7160 comprising 100-day SMA.
On the downside, an upward sloping support-line connecting lows since March 11 can restrict nearby declines at 0.7070, a break of which can recall 0.7030 and 0.7000 on the chart.