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Dec 09 - 01:55 PM

AUD/USD - COMMENT-AUD/USD Hits 2-1/2-Yr High, Eyes Fib Resistance Above 0.7500

By Paul Spirgel  —  Dec 09 - 11:50 AM

AUD/USD extended recent gains to a new 2 1/2-year high of 0.7485 on Wednesday and should be able to further its rally, with bulls firmly in charge and chart signals pointing higher.

In addition to Asia's China-led Asia recovery and relatively low COVID exposure, Australia has the benefit of being far away from Brexit exposure, all of which has enhanced the aussie as a quasi-haven destination.

With the RBA next scheduled to meet on Feb.
2, and recent economic data upbeat nL1N2IO370, aussie bulls will likely be rewarded as the rates focus shifts to other economies, which are tipped to be adding stimulus in a boon to global risk.

AUD/USD bulls remain firmly in control as the pair rises with 10-DMA support, currently at 0.7402.

Near-term targets are the upper 30-day Bolli at 0.7519 and upper 30-week Bolli by 0.7547.
Though short-term moving averages remain upward sloping, the 55- and 100-DMAs, both at 0.7218 are both flattening, hinting that the Aussie rally may be losing steam.

With COVID vaccines rolling out, and the Fed and ECB expected to remain accommodative as the global recovery takes hold, Australia-U.S. yield spreads are likely to widen, further enhancing the aussie's allure and lifting AUD/USD higher still.
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AUD Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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