AUD/USD runs into near-term resistance level, what to watch out for next?

Technical Analysis

Author: Justin Low | audusd

The pair is higher on the day, but upside move is stalling for now

AUD/USD tested key support levels on Friday, but ultimately bounced back as buyers held firm at the 100 and 200-day MAs.

The rebound in stocks and risk sentiment saw the pair end Friday higher and today it is continuing the move upwards as well. But so far, the upside move is stalling at a near term resistance level, more specifically the 100-hour MA (red line):

There are reports saying that funds are covering shorts that were built up recently, as we approach some key data points later in the week.

The two main ones to watch out for is the US CPI report due on Wednesday and the Australian jobs report due on Thursday. Of course, a lot can happen in between but these are the two major releases on the week for both currencies.

Apart from that, later on Friday (16 February) the options board is showing that there is an expiry at 0.7850 - not far away from current levels - for the amount of AUD 2.4 billion. Just take that into account if we're anywhere near as we head into the end of the week later.

But I must emphasise once again, risk sentiment will play a major role in determining the movement for the pair - so be vigilant on that front and don't just rely on fundamentals or technicals solely.

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