Aussie Eyeing Fresh Breakout
Weak USD Boosts Aussie
The Aussie is knocking on the door of current YTD highs today with price now back up at the .7153 level following the reversal higher above .6942. AUD has been one of the strongest beneficiaries of the recent wave of USD weakness, bolstered by better risk appetite this week as well as hawkish RBA expectations. Optimism around US/Iran peace talks has seen crude prices falling lower this week, leading to a softer USD and higher equities and commodities prices. With the high beta AUD back in demand, the pair should continue higher while the Iran war news flow remains on the more supportive side. For now, traders are reassured that there has been no fresh US military attack and that Trump has signalled talks should resume in coming days. If the current dynamic (bearish crude/USD, bullish risk FX) continues, AUDUSD stands to breakout to fresh highs in coming sessions.
Hawkish RBA Expectations
Away from the cross-market impact of developments with the Iran war, AUD is also being lifted by hawkish RBA expectations. Higher inflation and hawkish signals from the bank have seen the market’s RBA projections turn more hawkish in recent weeks with traders now pricing in a fresh hike at the upcoming meeting later this month. Looking ahead, focus will be on the latest Aussie jobs data due overnight with any strength in that data likely to further fuel hawkish RBA expectations.
Technical Views
AUDUSD
The rally in AUDUSD has seen price trading back up to test the big .7153 resistance just ahead of YTD highs. With momentum studies bullish, focus is on a breakout higher with the .7285 level and bull channel highs the next upside marker to note. To the downside, .6942 remains the key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.