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    Technical Analysis – AUDUSD gains capped by 100-DMA

    AUDUSD ended the week on Friday with a 2.5% gain but is being capped by the 100-day moving average after meeting resistance just below 0.7370. Momentum indicators are mixed with the stochastics continuing to rise, suggesting there is still some upside momentum despite today’s dip. However, further gains in the near term are likely to be limited as the %K line has already crossed into overbought territory.

    The MACD is still in negative territory, underlining the broader negative outlook for the pair. Prices had retraced over 61.8% of the January-April upleg from 0.6826 to 0.7834 before last week’s gains took the pair back above the 50% Fibonacci level. If prices manage to break above the 100-day moving average, the 38.2% Fibonacci level is likely to be the next resistance at around 0.7450. Beyond this, the 50-day moving average would be the next target, which is key in order to shift the outlook to positive.

    To the downside, the 50% Fibonacci level is the immediate support at 0.7330, while below that, failure to find support at the 200-day moving average at 0.7260 could see a resumption of the longer-term downtrend that started in mid-2014.

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