Upbeat developments across the globe have buoyed risk sentiment sharply which have primed AUD/USD for gains.
Investors now look to tomorrow's U.S. August jobs report and Fed Chair Powell's panel discussion.
A potential easing of U.S.-Sino trade tensions nL3N25W0JF along with positive developments on the Brexit and Hong Kong fronts have investors exiting safe haven assets.
Flows into higher risk assets are driving big gains in equities, commodities, yen crosses, EM currencies and high betas such as the aussie.
AUD/USD had rallied toward key 0.6825/35 resistance.
A break above that zone is likely to drive a big short squeeze, which would eventually lead to tests of 0.6900/20 and 0.6990/00 resistances.
Those tests are likely as long as the jobs result is not significantly above estimates and the Fed's Powell does not disappoint market expectations for rate cuts.
Today's U.S. data results have pared back some of those expectations FEDWATCH.
The market still expects the Fed to be more aggressive with cuts than the RBA RBAWATCH.
If the market's expectations of the Fed shift dramatically to less aggressive cuts AUD/USD's rally is likely to reverse and key support near 0.6675/80 should get tested again.
chart: Click here