AUD/USD Rallies Above 0.6600, More Gains Likely
- AUD/USD started a strong increase above the 0.6550 and 0.6600 resistance levels.
- A major bullish trend line is forming with support at 0.6580 on the 4-hours chart.
- GBP/USD rallied more than 100 pips and surged above 1.2300.
- EUR/USD also gained traction and broke the key 1.0950 resistance.
AUD/USD Technical Analysis
In the past few days, the Aussie Dollar gained bullish momentum above the 0.6500 resistance against the US Dollar. AUD/USD surged more than 100 pips and even climbed above 0.6600.
Looking at the 4-hours chart, the pair remained well from the 0.6505 swing low and settled well above the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).
The pair was able to surpass the 0.6590 and 0.6600 resistance levels. It even climbed above 0.6640 and traded to a new multi-week high above 0.6650. The current price action is positive and the pair is likely to continue higher towards the 0.6700 level.
If there is a downside correction, the pair might find bids near the 0.6620 and 0.6600 levels. There is also a major bullish trend line forming with support at 0.6580. The main uptrend support at 0.6550, below which the pair could start a significant downtrend.
Fundamentally, the US New Home Sales figure for April 2020 was released by the US Census Bureau. The market was looking for a 21.9 decline in sales compared with the previous month.
However, the result was positive as there was a 0.6% rise in sales instead of any decline. The last reading was also revised down from -15.4% to -21.9%.
The report added:
The median sales price of new houses sold in April 2020 was $309,900. The average sales price was $364,500.
Overall, AUD/USD might correct in the short term, but there are chances of more upsides in the near term.
Upcoming Economic Releases
- Richmond Fed Manufacturing Index for May 2020 (MoM) - Forecast -47, versus -53 previous.