The Australian Dollar has been a beneficiary of the global economic recovery that has taken place over the last two quarters. On the other hand, the US Dollar, particularly in recent weeks, has faltered and helped fuel gains in a variety pairs and some commodities. As a consequence, AUD/USD surged from 0.7000 in early November to 0.7450 earlier this week.
Even as many of the same fundamental forces continue to pressure the pair, progress has slowed and resistance looms overhead. Already, AUD/USD has stalled just south of 0.7450 which coincides with a series of highs dating back to June and July 2018. The Australian Dollar’s inability to push higher does not rule out further gains, especially given the rate is at it highest point since the Summer of 2018.
That being said, nearby resistance could give rise to shorter-term pullbacks that would allow AUD/USD to consolidate before continuing higher in accordance with the longer-term trend. Initial support is rather sparse apart from the lower-bound of an ascending channel and possible horizontal support near 0.7395. As a result, losses could accelerate if the levels are pierced and the next area of notable support may not exist until 0.7340 or 0.7244. Read more….
Chart of the Day
AUDUSD is favored to extend higher while pair stays above July 14 low. This video looks at the Elliott Wave path.