AUDUSD Boosted by Renewed Risk Appetite, Retests Key Resistance Zone

AUDUSD climbed 0.5% in Asian and European trading on Monday, fully reversing Friday’s decline and signaling a potential bullish continuation.

The fresh surge tested critical resistance in the 0.6600 zone, where the 200/100DMA convergence and the base of the rising daily cloud had previously halted gains. The strength of this move diminishes the likelihood of a bull trap or a stalled recovery, but a clear break above these barriers is essential to pave the way for further upside.

Failure to sustain the break could lead to prolonged consolidation or a shift to a bearish near-term outlook if the pair falls below the 10DMA at 0.6538.

Daily technical indicators present a mixed picture, with moving averages in varied alignment, momentum trending upward but still in negative territory, and an overbought stochastic, all contributing to uncertain short-term direction.

On the fundamental side, improved market sentiment and a rebound in Asian stocks have provided fresh support to the risk-sensitive Aussie dollar, which could be crucial in pushing the pair through key resistance levels.

A sustained break higher would target 0.6626 (Fibo 61.8% of the 0.6798/0.6348 decline) and potentially 0.6679 (daily cloud top). The immediate support lies at the broken Fibo 50%, reinforced by the daily Kijun-sen at 0.6573, with the pivotal 10DMA at 0.6538 offering additional support.

Res: 0.6609; 0.6626; 0.6679; 0.6692
Sup: 0.6573; 0.6564; 0.6538; 0.6520