AUD/USD Could Extend its Advance on a Clear Break Above a Fibonacci Resistance Level

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AUD/USD Current Price: 0.7229

• Chinese data was mixed, with the manufacturing PMI contracting in September.
• Soaring gold prices helped the aussie to post gains vs its American rival.
• AUD/USD could extend its advance on a clear break above a Fibonacci resistance level.

The AUD/USD pair recovered most of the ground lost on Wednesday, ending the day at around 0.7230. Despite a sharp slide in US equities and persistent demand for the American currency, the pair got to advance on the back of soaring gold prices. The bright metal added roughly $40 per troy ounce, overshadowing the greenback as the preferred safe-haven. AUD/USD topped at 0.7256, retreating mid-US afternoon, although retaining most of its intraday gains.

Australia published August Building Permits, which rose 6.8% MoM, better than anticipated. However, the focus was on China. The September NBS Manufacturing PMI unexpectedly contracted to 49.6, while the Non-Manufacturing PMI beat expectations with 53.2.  Friday is a national holiday in China, which means activity may be limited during the upcoming Asian session. Australia will publish the September Commonwealth Bank Manufacturing PMI and August Home Loans.

AUD/USD short-term technical outlook

The AUD/USD pair has met sellers around the 61.8% retracement of its latest daily advance, still a critical resistance level at around 0.7250. The daily chart suggests that the advance may be corrective, as technical indicators barely bounced from near oversold readings, holding within negative levels. The 20 SMA maintains its strong bearish slope above the current level, indicating selling interest is still strong.

In the near term, and according to the 4-hour chart, the recovery also seems corrective. Technical indicators maintain their bullish slopes but within negative levels, as the pair develops below a mildly bearish 20 SMA. A clear break beyond 0.7250 would open the door for a steeper advance in the last trading day of the week.

Support levels:  0.7175 0.7130 0.7090

Resistance levels: 0.7250 0.7290 0.7330

Image Sourced from Pixabay

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.