July 25, 2022 13:39:30
Amid a rise in risk appetite, ahead of the key Fed meeting, the riskier asset started the fresh week on an optimistic note.
Wall Street is expected to open higher as investors braced for the US earning sessions. The European market ended higher lifted by the shares of the bank despite the uncertainty and anxious feeling before the Fed rate decision.
The Aussie gained on the market optimism and the rise in the commodity prices. The pair strengthened above 0.6950, hovering near its highest level in a month.
On the second thought, a broader weakness in the US dollar supported the recovery in AUD. A positive U-turn in the risk sentiment undermines the demand for the safer greenback and instills some support to the risk-sensitive Aussie.
On the domestic front, the Minutes of the last Reserve Bank of Australia showed that officials remained committed to further monetary policy tightening as it deemed interest rates were ‘still very low with a tight labor market and high inflation. This provided a much-needed push in the asset.
As of press time, AUD/USD reads at 0.6959, up 0.53% for the day.
50-day EMA offers immediate resistance
AUD/USD manages to gain fresh traction and recoups the higher level. A green candlestick indicates the bullish momentum in the recent price action.
However, the immediate resistance is found at the critical 50-day EMA at 0.6980. Further, this also coincides with the descending trend line.
The bearish trendline from the highs of 0.7660 acts as an upside barricade for the bulls. A sustained buying momentum is a prerequisite to pushing above the mentioned threshold.
The MACD, hovers below the mid-line with a bullish crossover, indicating the continuation of the upside.
On moving higher, the bulls would attempt to take out the psychological 0.7000 level.
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