From a technical perspective, the break out of the wedge consolidation favours a retest of October’s highs near 1.0750. The ongoing demand for the AUD from Sovereign reserve managers is also a bullsih indicator.
From a more bearish perspective, the liklihood of some rate cuts will weigh on sentiment. The ongoing Greek debt issues will also be weighing on risk sentiment, although this factor has certainly lost some focus in recent times.
I’d suggest using the 20-day MA at 1.0340 as a downside target and 1.0750 as a topside; playing the edges and avoiding the middle seems like the most sensible strategy.
