That kind of winning streak is usually a cautionary sign but the total magnitude of the move has been a modest 133 pips — less than the one-day rally following the Fed’s un-taper. Not only has AUD/USD broken out technically but other Australian dollar crosses have done the same.
It was tough to find a bigger AUD bear than me at the start of the year but with the RBA moving into neutral gear, there is room for optimism. The latest move breaks the 38.2% retracement of the April-August decline and the 50% level at 0.9715 or the 200-day moving average would be modest targets.
In the near-term, I would preach caution. The stock market is losing momentum following the agreement on the fiscal impasse and that might present a chance to buy a dip.