The pair is staying in the hunt for a third straight day of gains after the surge to fresh two-month highs upon the US CPI data release on Wednesday. The better risk mood is certainly helping and the early ground covered so far today is also bolstering sentiment with the pair holding near session highs around 0.7120-25.
Of note, buyers managed to breach the 100-day moving average (red line) yesterday and that opens up some room to roam to the topside but there is another key resistance level that is lurking nearby. The 200-day moving average (blue line) stands at 0.7149 and that may help to limit a further advance in the sessions ahead.
The dollar is trading more mixed right now with gains seen against the likes of the euro and pound and if risk appetite gets sapped as it did again late yesterday, I doubt the aussie can hang on to gains before we get to the weekend.
In any case, we are now trading in between the two key levels highlighted and the next trading bias for the pair is rather straightforward. Break above the 200-day moving average and buyers will open up the path towards retesting the May and June highs around 0.7266-82 while a break back below the 100-day moving average will put sellers back in control with the potential to fall back towards 0.7000 as the key target.
