AUD/USD hits 0.73 for the first time in six weeks, what's next?
Dollar remains offered as we head towards the US trading session
The aussie is continuing to make strides today pushing forward with further gains as the greenback stays offered. AUD/USD now looks towards cracking the 0.7300 handle as buyers look to build on a break of the 100-day MA (red line) @ 0.7267 earlier.
The improved sentiment in equities is also helping to drive the move higher in the aussie today but I wouldn't give the all clear just yet. As mentioned before, US traders will have their say before any firm break to the upside is justified but currently the technical picture continues to look even better for AUD/USD buyers.
The September high of 0.7315 will be called into question once 0.7300 gives way and that is one of the more important levels to look out for in the pair this year. A break above that would break the bearish pattern of lower highs, lower lows in the pair that has helped to drive the pair lower since the start of the year.
A break above that will no doubt result in a further squeeze to the upside as more shorts will be flushed out. Looking at the run over the past week, the break of these two key technical levels stand out for me:
- This year's downwards trendline @ ~0.7160
- 100-day MA @ 0.7267 (not tested since April, not held a break above since March)
The upside run just took out two key levels and is a strong indicator of a bullish run. Despite fundamentals working against the aussie in the bigger picture, positioning squeezes care very little for that and that is not something you'd want to stand in the way of when it happens.