AUD/USD trades to its highest levels since December 2018

AUD/USD W1 28-08

The drop in the dollar post-Powell and the risk-on party is continuing to fuel a further upside run in AUD/USD, as we see price trade above the 0.7300 handle for the first time since December 2018.

Price action has now broken above the February 2019 high @ 0.7295 and more importantly, buyers are now looking to secure a weekly close above the 200-week MA (blue line) @ 0.7253 ahead of the weekend.

That will mark a more bullish breakout in the pair with further resistance next seen from the December 2018 high @ 0.7394.

But for buyers, the technical picture is starting to look even better on a firm break above the 200-week MA pointed out above.

There are concerns that the upside run may be overstretched, especially with how correlated the pair has been with stocks - S&P 500 at an all-time high.

But at the same time, it is tough to argue with the technical picture and Powell's remarks from yesterday basically cements that the longer-term outlook for the dollar remains bleak as the Fed is likely to keep current policy in place for many more years to come at least.

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