The Australian dollar regained traction on Friday and bounced to three-day high, confirming initial reversal signal after Thursday's Doji candle signaled that three-day pullback from new highest in nearly two months (0.7478) lost traction.
A fresh advance was underpinned by growing optimism on Biden-Xi call as two presidents discussed how to avoid the conflict that lifted the risk-sensitive Aussie.
Bulls are facing strong barriers at 0.7408/11 (daily cloud base/50% retracement of 0.7478/0.7345 bear-leg). A break here would signal an end of the corrective phase and a reversal with weaker US dollar on pre-weekend profit-taking.
However, risk of a recovery stall is still into play, keeping the downside vulnerable.
Daily analysis reveals mixed signals as falling thickening daily cloud weighs and bullish momentum is fading, partially offsetting positive signals in bullish configuration and forming multiple bull-crosses.
Expect initial direction signals on break of either 0.7345 (Sep 8 low) or 0.7408 (daily cloud base).
Res: 0.7408, 0.7426, 0.7478, 0.7498.
Sup: 0.7378, 0.7345, 0.7327, 0.7308.
