HomeForex MarketAUD/USD Looks to 0.7500 After Printing 4-Month High

AUD/USD Looks to 0.7500 After Printing 4-Month High

Australian Dollar, AUDUSD, Federal Reserve – Talking Points

  • AUD/USD slightly off weekly highs, support below at 0.7450
  • Aussie Dollar buoyed by strong commodity prices, fully priced Fed
  • Currently testing key Fibonacci resistance from March 2020 move

The Australian Dollar is looking to build on recent gains after printing a fresh 4-month high during Tuesday’s session. After consolidating around the 0.7400 level for much of last week, AUD/USD made a break higher toward 0.7500 but ultimately stalled out. The pair has benefitted from a surge in commodities prices of late, but perhaps more importantly, the Aussie Dollar remains relatively insulated from geopolitical tensions. With the Fed now effectively priced for 50 basis points at the May FOMC meeting, USD strength may wane, giving AUD/USD a path to further gains.

The Australian Dollar remains quite perky, despite consolidating after Tuesday’s run up above 0.7450. While the pair has been unable to make a sustained charge at the 0.7500 level, bulls will find comfort in the fact that 0.7480 has provided firm support for price. So long that this support props up price, bulls may look to challenge that key 0.7500 threshold.

Australian Dollar 1 Hour Chart

Chart created with TradingView

When we back out to see things from a wider lens, we see that AUD/USD currently sits at the 0.786 retracement of the move off the March 2020 lows. This may explain why bulls have not been able to launch an attack on 0.7500 as of yet, as price remains trapped around 0.7475. Should this fibbo resistance give way to the bulls, the October highs around 0.7550 may represent a fair first upside target. The last breakout from this Fib resistance did occur in that October window, but the rally was unsuccessful with price ultimately bottoming around 0.7000. Will this test be different? Only time will tell.

Australian Dollar Weekly Chart

Australian Dollar Technical Analysis: AUD/USD Looks to 0.7500 After Printing 4-Month High

Chart created with TradingView

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— Written by Brendan Fagan, Intern

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