The Australian dollar rose to two-month high on Tuesday, in extension of the latest strong bullish acceleration, lifted by renewed risk sentiment on significantly weaker US dollar.
The pair is running on extended third wave of five-wave cycle from 0.6170 (Oct 13 low) which hit 138.2% Fibonacci expansion (0.6762), also Fibo 61.8% retracement of 0.7136/0.6170 descend.
Another bullish signal was generated on today’s break above descending thick daily cloud.
Bulls need a clear break of 0.6762 barrier to open way towards targets at 0.6845/0.6908 (FE 161.8%/Fibo 76.4% retracement, respectively).
Daily Tenkan-sen and Kijun-sen in bullish setup and strong bullish momentum underpin the action, though strongly overbought stochastic warns that bulls may take a breather in coming sessions.
Dip-buying remains favored, ideally above broken 100DMA/daily cloud top at 0.6700 zone, but deeper pullback cannot be ruled out, with significant supports seen at 0.6653 (broken Fibo 50% retracement) and 0.6600 (lower 20-d Bollinger band).
Res: 0.6805; 0.6845; 0.6908; 0.6956.
Sup: 0.6698; 0.6653; 0.6600; 0.6539.
