September 24, 2024 at 05:51AM
Despite all the ups and downs this year, the pair had been mostly trading within a band of roughly 300-400 pips in 2024. But with the latest upside move since two weeks ago, buyers might be eyeing a stronger breakout here. That especially with the dollar keeping more sluggish amid the diverging stance between the Fed and RBA.
AUD/USD is now trading to 0.6860, its highest levels since December last year and closing in on the high then at 0.6871. Buyers remain in the driver’s seat, even more so now as the policy divergence above is made even starker.
The Fed cut rates by 50 bps last week and traders are even contemplating to push that further by pricing in stronger odds of a repeat move in November. As for the RBA, the message today is loud and clear. Inflation remains the number one problem and they’re in no position to declare victory yet. Holding higher for longer it is then.
Alongside better momentum in risk assets, that is providing a tailwind for AUD/USD to leg higher still.
The December high at 0.6871 is in focus now. And if buyers get past that, it will bring in the June and July 2023 highs at 0.6892-00. That will be a major technical resistance point in play before the 0.7000 mark comes into play.
This article was written by Justin Low at www.forexlive.com.
