AUD/USD closed 0.77% higher on Monday’s trade and is set to extend gains as technical analysis shows further upside.
Vaccine-driven risk flows allowed risky currency assets to gain traction on Monday and today, with the Aussie on course towards the 2-month highs at the time of writing.
The pair also got a push from positive retail sales and industrial production data from China. The AUD/USD is considered as a trading alternative for Chinese GDP and manufacturing data, as Australia is the main import destination for China’s industrial sector.
The AUD/USD was consolidating previous session’s up moves as the pair trades range bound above the 0.73 mark.
The Aussie little has not changed a lot after the today’s RBA minutes. Minutes of the Reserve Bank of Australia’s (RBA) Nov. 3 policy meeting released some hours ago showed that the board pledged not to increase interest rates for at least three more years.
The central bank however highlighted that monetary and fiscal stimulus would be required for a significant time and that it will be in the form of a government bond purchase program.
Technical analysis shows that the pair is in place for further upside traction. Volatility is rising, oscillators are biased higher and ADX and MACD support upside. Price action is above daily cloud.
If the Aussie dollar can break above its short term consolidation with resistance at the 0.7340 level we can expect to test the September highs near 0.742 and a extension of the long-term trend that began in April, even to the 78.6% Fib at 0.7573. A break below 0.715 support would signal a bearish trend.
Warning:
Trading on CFDs involves a high level of risk, including full loss of your trading funds. Before proceeding to trade, you must understand all risks involved and acknowledge your trading limits, bearing in mind the level of awareness in the financial markets, trading experience, economic capabilities and other aspects.
Disclaimer:
Market Trends, Charts, Trading Ideas or other information provided by BKFX (Pty) Ltd and/or third parties are not intended as an investment advice and/or recommendation. The information provided is not presented as suitable or based on your specific need. You are responsible for your own investment decisions and you should not trade with money you cannot afford to lose. Any views or opinions presented in this Article are solely those of the author and do not necessarily represent those of the Company, unless otherwise specifically stated. The Company may provide the general commentary which is not intended as an investment advice and must not be construed as such. Seek advice from a separate financial advisor if an investment advice is needed. The Company assumes no liability for errors, inaccuracies or omissions, inaccuracies or incompleteness of information, texts, graphics, links or other items contained within this article/material.