Aussie Bulls Hold Control as 0.72715 Resistance Caps Momentum

No doubt that AUD/USD still has the bulls interested. The weekly structure looks strong and the daily chart holding above the 21-EMA with Renko not breaking down either. But it’s Monday. Demand is taking a bit of a breather. The weak dwelling approvals didn’t help, adding a small drag on Aussie performance. But the bullish setup isn’t wrecked. All this is is a choppy bullish grind. Not a reversal in trend.

Australia Dwelling Approvals Drop Adds Mild Drag to AUD/USD Outlook

Australia’s dwelling approvals came in weak, falling 10.5% month-over-month versus the -9.9% forecast. This is chipping away from the Aussie growth story. Not massive though. But this is still bearish around the edges. This data can also reduce RBA-hawkish pricing, soften growth expectations, and sort of cap AUD/USD upside near resistance. Still, this alone won’t kill the medium-term bullish setup.

Australia Dwelling Approvals fell 10.5% MoM in May

Bar Chart Showing Australia Building Permits

Source: TradingView

AUD/USD Weekly Rally Tests Resistance as Supertrend Stays Bullish

AUD/USD looks really strong on a weekly timeframe. But it’s down for the week though. It’s only Monday. Price pushed through the 0.6833 pivot, cleared the 0.7 zone and punched through 0.7110, and now is attacking 0.7572 resistance. The air is getting a little thin up here. But that’s good. Things shouldn’t go straight up. The short-term Supertrend is still up along with the long term one. The rally in AUD/USD is expected to continue once the dual Supertrend holds.

AUD/USD Weekly Chart Shows Bulls Pressing into Resistance

Weekly AUD/USD candlestick chart

Source: TradingView

AUD/USD Daily Momentum Cools as Bulls Test the 0.7220 Breakout Zone

Seeing some decline in demand when we zoom a bit closer on the daily chart. But the move so far has been good for AUD/USD. The price bounced sharply from the 0.6833 low and reclaimed the 21-EMA and is now hovering right around the prior high of 0.7188. The RSI is near 60 so momentum is still leaning to the positive side. Still, the candles are getting a little choppy. But that’s normal. A clean push above 0.7220 would keep the bullish structure alive, while a slip back below the 21-EMA would show that the bullish move needs a refresher.

AUD/USD Daily Chart Showing Some Bullish Limitations at Resistance

Daily AUD/USD candlestick chart

Source: TradingView

AUD/USD Renko Momentum Cools as 0.7220 Resistance Caps the Rally

AUD/USD’s Renko still looks bullish, but it’s not as clean as it was. Price is comfortably above the 5001-SMA so the broader short-term structure is still constructive. Very good base. Still, the recent bricks are choppy near the 0.7220 resistance zone, and that tells me that demand for the Aussie is not lustful anymore. The Supertrend has been flipping a couple times, which screams rangebound not trending. RSI is still above 50 with the Z-Score SMA trending lower, signalling that the consolidation is happening. Demand is still there but they need a fresh push above 0.7220 to wake this up again. Below 0.7170, the tape gets irritating fast.

AUD/USD 0.001-Brick Renko Showing Short-Term Momentum Cooling

AUD/USD 0.001-brick Renko Chart

Source: TradingView

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 0.6833,0.7031

Resistance Levels: 0.72715, 0.74070

Medium Term Path: AUD/USD has a positive medium term path still but the pair needs to work through the 0.72715 resistance before the next bullish leg can properly open. The weekly structure remains supportive and the daily trend is still holding above the 21-EMA, and from the Renko view the bricks are above the 500-SMA. I’m still leaning for Aussie higher. I’d expect a choppy grind higher rather than a straight-line breakout.