Nick Nasad
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AUD/USD: Passes Key Test with Hurdle Over 0.8960

The AUD/USD has managed to stage an impressive February rally, after putting in a bottoming formation in late January.

  • Overnight, the pair passed a critical test as it managed to push above the 0.8960 area, where it had gotten caught up over the previous 3-trading sessions. This was also where the 55-daily EMA (in blue) was present.
  • With the surge higher, the pair's bears, that were looking for a retrace to short were likely caught off guard shorting, and when those traders bailed, there was an extra impetus for the pair to push higher.
  •  Now, there are 2 clear levels to the topside present.
  • The first is the 0.9085 area, which was Jan's high, as well as where the 100-daily EMA (in green) is currently situated.
  • Above that we have the next pivot at 0.9165.
  • Now, the macro situation changed for the Aussie when the RBA said that it was switching from a dovish to a neutral focus, and that has helped be a catalyst for the recent rally, but in the medium-term picture I believe that the USD should be favored, and so if the pair does reach that 2nd topside target, I would look to see if there is a loss of momentum and reversal.
  • From the current price action, the bears would retake control if they are able to push back and have a daily close below the 0.8960 area.