A Bullish Opportunity Above EMA200 After Pullback
farhan fazal
AUDUSD·
Nov 26 2022
The currency pair is growing inside the bullish channel, moving above the Ichimoku Cloud, which suggests the prevalence of an uptrend. A test of the upper border of the Cloud is expected at 0.6695, followed by growth to 0.6945. Growth will be additionally supporter by a bounce off the lower border of the bullish channel. The scenario can be cancelled by a breakaway of the lower border of the Cloud under 0.6535, which will entail further falling to 0.6445.
Meanwhile, the USD Index (DXY) is still in the hangover of ‘less-hawkish’ cues from the Federal Open Market Committee (FOMC) minutes. The US Dollar is hovering below the critical hurdle of 106.00 amid the risk appetite theme.
On a daily scale, the Aussie asset has confidently established above the horizontal support plotted near July 14 low around 0.6700. The next hurdle for the Aussie asset is the 200-period Exponential Moving Average (EMA) at 0.6847, which has remained a major ceiling.
The 20-period EMA at 0.6616 is scaling higher, which adds to the upside filters.
Meanwhile, the Relative Strength Index (RSI) (14) is focusing on shifting into the bullish range of 60.00-80.00, which will trigger a bullish momentum.
Going forward, a break above Thursday’s high at 0.6778 will extend the three-day winning streak, which will drive the asset toward the round-level resistance at 0.6800, followed by the 200-EMA at 0.6847.
On the flip side, the Australian Dollar could lose strength if the Aussie asset drops below Monday’s low at 0.6585. This will drag the major towards October 4 high at 0.6548 and November 2 high at 0.6493.