AUD/USD surged to a 2½-month high on Friday, with the pair positioned to potentially break above 0.7700 if the U.S. dollar continues to be shunned by investors. The dollar's broad weakness began Wednesday after Treasury Secretary Bessent announced plans to double buybacks of long-duration Treasury securities, and selling intensified Thursday when he indicated buybacks could exceed $4 billion per issue. This dollar aversion has fueled sharp rallies not just in AUD/USD but across alternative assets including gold, silver, bitcoin, and ether. Should the greenback remain out of favor, both these dollar alternatives and AUD/USD could stay well-bid.

From a technical standpoint, AUD/USD's price action is flashing upside risks, and an extension of the current rally could trigger a significant bullish signal. Since March, the pair has been consolidating gains from its rally off the November 2025 monthly low—a pattern that itself is considered bullish. This consolidation phase would be complete with a break above the May monthly high, which would suggest AUD/USD's longer-term uptrend is set to resume.

If that breakout occurs, the measured-move target derived from the November 2025 low to May 2026 high rally points to a test of the 0.7720 area. Adding to the bullish case, the monthly RSI is rising and the 20-month Bollinger Bands are both rising and widening—technical signals that support the potential for further gains in the pair.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)