AUDUSD Daily Range Support (Jan 13, 2016)

The pair has found support at the .6950 minor psychological level and climbed back above .7000, possibly setting its sights on the top of the range near the .7400 major psychological level.

However, the 100 SMA is still below the 200 SMA for now, indicating that the path of least resistance is to the downside and that a break lower might still take place. Stochastic just reached the oversold area and is starting to turn higher, which suggests that buyers could gain the upper hand soon. A break below the range support could take AUDUSD lower by around 400 pips, which is the same height as the rectangle formation.

There have been no major reports out of the US lately, as it looks like the return in risk appetite is limiting the safe-haven currency's gains. Catalysts lined up include the retail sales, PPI, and consumer sentiment index on Friday.

Earlier today, China released a stronger than expected trade balance, as the surplus widened from 343 billion CNY to 382 billion CNY, buoyed by a 2.3% gain in exports. Although imports fell by 4%, this was better than the projected 7.9% tumble. On Thursday's Asian session, Australia will release its employment report and possibly show a larger gain in hiring.

By Kate Curtis from Trader's Way