Testing The 20-Day EMA

AUD/USD finished higher on the day, helped by a softer greenback, but off best levels after commodity currencies lost favour in the US session. The catalyst was news that China has released its national crude oil reserve to alleviate a surge in domestic energy costs. AUD/USD rose as high as 0.7393 before dropping back, the pair last down 1 pips at 0.7369.

• From a technical perspective AUD/USD remains off recent highs and held the bulk traded lower again yesterday. The pair has cleared the 50-day EMA and is testing support at the 20-day EMA. The near-term outlook is bullish though and dips are considered corrective. The focus is on 0.7503, the Jul 13 high that also marks a key near-term hurdle for bulls. Key support to watch is 0.7222, Aug 27 low, a break would signal a resumption of bearish activity. Initial support is at 0.7344, the 20-day EMA.
• The local coronavirus situation will be watched, though recent developments have failed to significantly move markets. Victoria reported 334 new cases in the past 24 hours, up from 324 yesterday. It was reported yesterday that Victoria will end its lockdown of all regional areas outside Melbourne except for one council zone with high case numbers, while in Sydney the stay-at-home order will be lifted for fully vaccinated adults once 70% of the population has received two inoculations.
• The economic docket is bereft of any significant releases on Friday, markets look ahead to House Price Index data and NAB business survey on Tuesday next week.