AUD/USD up another 0.3% today to 0.7388
The aussie has shown quite remarkable resilience in the past two weeks, with AUD/USD itself bouncing back from near 0.7100 to now close in on 0.7400.
While that may owe in some part to the dollar floundering post-Jackson Hole and more positive risk sentiment, the aussie also isn’t seeing much downside from the ongoing virus situation in New South Wales and the RBA potentially delaying tapering next week.
I still reckon the two factors mentioned for the aussie are reasons to keep a divergence play against the currency but perhaps that may be only more relevant to AUD/NZD – even then, the pair has invalidated the break below the November low of 1.0418 this week.
For now, the technicals are supportive for the aussie against the dollar and it points towards a potential test of 0.7400 again, where upside momentum stalled previously during July and August trading.
As such, that offers a key line in the sand for buyers to contest in order to establish any fresh upside leg while sellers will have to defend that to hold their ground.
As things stand, the dollar side of the equation is a key consideration this week with the US non-farm payrolls release tomorrow a key risk event.
That will set the tone towards the end of the week but a poor jobs report may yet spur a fresh break for AUD/USD to the upside back towards 0.7500 potentially.
Otherwise, we may see more of a middling tone ahead of the weekend with 0.7400 capping gains with downside limited closer to key near-term levels at 0.7275 and 0.7316.
