CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

• AUD/USD retreats after touching a 19-month peak amid reviving USD demand. 
• Global economic woes and geopolitical risks benefit the safe-haven Greenback.
• The divergent Fed-RBA policy outlook limits any meaningful slide for the pair. 

The AUD/USD pair struggles to find acceptance above the 0.6900 round figure and retreats a bit from its highest level since February 2023 touched earlier this Wednesday. The intraday descent drags spot prices to the 0.6880-0.6875 region, or a fresh daily low during the first half of the European session and is sponsored by a modest US Dollar (USD) uptick.

Despite the latest optimism over China's new stimulus measures, lingering concerns about a global economic downturn and persistent geopolitical risks temper investors' appetite for riskier assets. This is evident from a weaker opening across the European equity markets, which assists the safe-haven USD to rebound from the vicinity of the YTD low touched last week and drives flows away from the risk-sensitive Aussie. That said, a combination of factors should continue to act as a tailwind for the AUD/USD pair and help limit deeper losses.

The markets have been pricing in a greater chance that the Federal Reserve (Fed) will announce another 50 basis points (bps) rate cut in November. This marks a divergence in comparison to the Reserve Bank of Australia's (RBA) hawkish stance and should lend support to the AUD/USD pair. In fact, the RBA reiterated on Tuesday that policy will need to be restrictive until confidence returns that inflation is moving sustainably towards the target. Moreover, RBA Governor Michele Bullock stated that the recent data has not significantly influenced the policy outlook.

Meanwhile, official data released earlier today showed that the headline Australian Consumer Price Inflation (CPI) dropped in August to its lowest level since early 2022, though the decline in core inflation was less pronounced. The data was not enough to justify interest rate cuts by the RBA in the near term, which, in turn, suggests that any subsequent decline in the AUD/USD pair might still be seen as a buying opportunity and remain cushioned. Traders might also prefer to wait for Fed Chair Jerome Powell's speech on Thursday and the US PCE Price Index on Friday.

• AUD/USD jumps to near 0.6870 as the Australian Dollar strengthens on multiple tailwinds.
• China’s massive stimulus announcement and RBA’s hawkish rate stance strengthen the Aussie Dollar.
• The next move in the US Dollar will be influenced by the US core PCE inflation data.

The AUD/USD pair rallies to near 0.6870 in Tuesday’s North American session. The Aussie asset gains strongly after China’s massive stimulus boost to revive household spending and real estate demand and uplift economic growth.

In a press conference on Tuesday, China’s top regulators outlined a sharp decline in key interest rates and establishment of RMB500 billion swap facility and RMB300 billion re-lending fund by the People’s Bank of China (PBoC). The announcement of the big-bang stimulus has strengthened the Australian Dollar’s (AUD) outlook, being a proxy to China’s economy.

The Australian Dollar was already outperforming on Reserve Bank of Australia’s (RBA) hawkish policy outcome in which the central bank left interest rates unchanged at 4.35% for the eighth time in a row. The RBA kept interest rates steady on upbeat labor market conditions and price pressures remaining persistent.

Meanwhile, the US Dollar (USD) faces selling pressure as investors expect that the Federal Reserve (Fed) could opt for continuing the aggressive policy-easing cycle. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slumps to near 100.60.

According to a CME FedWatch tool, the likelihood for the Fed to cut interest rates by 50 bps to 4.25%-4.50% in November is close to 52% from 29% a week ago.

This week, investors will keenly focus on the US Personal Consumption Expenditure inflation (PCE) data for August, which will be published on Friday. Economists expect the core PCE price index, which is the Fed’s preferred inflation gauge, to have grown to 2.7% from 2.6% in July.

• AUD/USD pulls back after touching a fresh YTD peak, albeit the downside remains limited.
• The divergent RBA-Fed policy expectations act as a tailwind amid the upbeat market mood.
• China announces a range of stimulus measures and also underpins the China-proxy Aussie.

The AUD/USD pair struggles to capitalize on its modest intraday gains to the 0.6870 region, or a fresh YTD peak touched earlier this Tuesday and touches a daily low during the first half of the European session. Spot prices, however, rebounded a few pips in the last hour and currently trade around the 0.6835 region, nearly unchanged for the day. 

The intraday pullback lacks any obvious fundamental catalyst and could be attributed to some profit-taking, especially after the recent rally of over 250 pips from the monthly low, around the 0.6620 region. Any meaningful corrective fall still seems elusive in the wake of the divergent Reserve Bank of Australia (RBA)-the US Federal Reserve (Fed) policy expectations. 

The Australian central bank, as was widely expected, decided to stand pat for the seventh straight meeting and reiterated that policy will need to be restrictive until confidence returns that inflation is moving sustainably towards the target range. Adding to this, RBA Governor Michele Bullock stated that the recent data has not significantly influenced the policy outlook.

Furthermore, China announced a broad range of stimulus measures on Tuesday to support the faltering economy, which, along with renewed US Dollar (USD) selling, should act as a tailwind for the AUD/USD pair. In fact, the People's Bank of China (PBOC) lowered the Reserve Requirement Ratio (RRR) by 50 bps, freeing up about 1 trillion yuan for new lending.

Meanwhile, expectations for more aggressive policy easing by the Federal Reserve (Fed), along with the underlying strong bullish tone across the global equity markets, keep a lid on the recent US Dollar (USD) recovery from the YTD low. This should further contribute to limiting losses for the AUD/USD pair, instead support prospects for further near-term gains.

The Australian Dollar (AUD) is likely to trade sideways, probably in a range of 0.6800/0.6855. In the longer run, there is still room for AUD to rise further, but there may not be enough momentum for it to challenge 0.6870, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

Rangebound between 0.6800 and 0.6855

24-HOUR VIEW: “We expected AUD to trade sideways yesterday. Our expectation was incorrect, as AUD rose to 0.6853, closing at its highest level this year (0.6838, +0.45%). Despite the advance, upward momentum has barely increased, and AUD is unlikely to rise much further. Today, we continue to expect AUD to trade sideways, probably in a range of 0.6800/0.6855.”

1-3 WEEKS VIEW: “We continue to hold the same view as last Friday (20 Sep, spot at 0.6800). As highlighted, while there is still room for AUD to continue to rise, it may not have enough momentum to challenge to significant resistance at 0.6870. On the downside, a breach of 0.6770 (strong support’ level was at 0.6740 yesterday) would mean that the upward pressure that started early last week has eased.”

• AUD/USD strengthens above 0.6800 with RBA policy on the horizon.
• The RBA is expected to leave interest rates unchanged on Tuesday.
• The US Dollar recovers amid growing uncertainty over the Fed’s interest rate outlook.

The AUD/USD pair performs strongly above 0.6800 in Monday’s European session. The Aussie asset gains as the Australian Dollar (AUD) outperforms its major peers ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision, which will be announced on Tuesday.

Traders expect the RBA to leave its Official Cash Rate (OCR) unchanged at 4.35%, with inflationary pressures remaining persistent and upbeat job growth. Therefore, investors will focus on fresh guidance on interest rates for the remainder of the year. Currently, financial market participants expect that the RBA will keep its OCR at its current levels by the year-end.

Meanwhile, the US Dollar (USD) bounces back amid growing doubts over the Federal Reserve’s (Fed) likely monetary policy action in its remaining two monetary policy meetings this year. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises to near 101.00.

According to the CME FedWatch tool, the Fed will cut interest rates further by a total of 75 basis points (bps) in the November and December meetings, suggesting that there will be at least one 50 bps interest rate cut decision. For November’s policy meeting, the likelihood of the Fed reducing interest rates by 50 bps to 4.25%-4.50% is close to 50%.

On the contrary, a strong majority of over 100 economists expect that the Fed will cut its interest rates by 25 bps in each of its monetary policy meetings in the remaining year, according to a Reuters poll.

In today’s session, investors will keenly focus on the preliminary United States (US) S&P Global PMI data for September, which will be published at 13:45, as it will provide fresh cues on the nation’s current economic health.

The report is expected to show that the Manufacturing PMI came in higher at 48.5 than August’s print of 47.9 but remains below the 50.0 threshold. In the same period, activities in the service sector are estimated to have grown at a slower pace to 55.2 from the former reading of 55.7.

The Australian Dollar (AUD) is expected to trade in a sideways range of 0.6775/0.6825. In the longer run, there is still room for AUD to rise further, but there may not be enough momentum for it to challenge 0.6870, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

AUD may try to challenge 0.6870

24-HOUR VIEW: “AUD traded between 0.6784 and 0.6829 last Friday, narrower than our expected sideways trading range of 0.6780/0.6840. There has been no increase in either upward or downward momentum, and we continue to expect AUD to trade sideways. Expected range for today: 0.6775/0.6825.”

1-3 WEEKS VIEW: “We continue to hold the same view as last Friday (20 Sep, spot at 0.6800). As highlighted, while there is still room for AUD to continue to rise, it may not have enough momentum to challenge to significant resistance at 0.6870. On the downside, a breach of 0.6740 (no change in ‘strong support’ level) would mean that the upward pressure that started early last week has eased.”

• AUD/USD loses ground near 0.6810 in Monday's early Asian session. 
• The expectation of further Fed rate cuts this year might weigh on the USD in the near term.
• The RBA is expected to keep the OCR unchanged at its September meeting on Tuesday. 

The AUD/USD pair trades with a mild negative bias around 0.6805 during the early Asian session on Monday. The softer Australian Dollar (AUD) creates a headwind for the pair. Investors will keep an eye on the flash reading of the US Purchasing Managers Index (PMI) on Monday for fresh impetus. 

The US Federal Reserve (Fed) cut interest rates by a larger-than-usual half-percentage point to a range of 4.75 to 5.00% last week. Policymakers also predicted an additional 75 basis points (bps) of rate cuts by the end of the year, which could continue to undermine the US Dollar (USD) against the AUD. Fed Chair Jerome Powell noted that the move was meant to show policymakers' commitment to keeping unemployment low as inflation eases. 

Fed Philadelphia President Patrick Harker said on Friday that the US central bank has effectively navigated a challenging economy over the last few years. He added that "hard" and "soft" data are both important in decision-making.

On the Aussie front, data released by Judo Bank and S&P Global on Monday showed that the preliminary reading of Australia's Judo Bank Manufacturing PMI dropped to 46.7 in September from 48.5 in August. Meanwhile, the Services PMI eased to 50.6 in September versus 52.5 prior, and the Composite PMI fell to 49.8 in September from 51.7 in the previous reading. The AUD trades with mild losses in an immediate reaction to the decline in Australian PMI readings. 

The Reserve Bank of Australia (RBA) will announce its interest rate decision on Tuesday, which is anticipated to keep the Official Cash Rate (OCR) at 4.35%. RBA governor Michele Bullock said that policymakers do not expect an interest rate cut in the “near term” and the RBA wouldn't be swayed by other nations cutting rates.

The Australian economy added more jobs than expected in August as the unemployment rate remained steady, making the case for interest rate cuts less likely in the short term. The Unemployment Rate in August came in at 4.2%, the Australian Bureau of Statistics reported last week. The consensus had expected it to remain in line with the 4.2% in July. The RBA rate decision will take center stage on Tuesday, followed by a press conference with Bullock.

• AUD/USD edges higher towards the top of a long-term range. 
• Momentum is diverging bearishly with price, however, suggesting a risk of a pullback evolving. 

AUD/USD keeps posting green candlesticks as it steadily creeps higher. The pair hit a new 2024 high of 0.6839 on Thursday and although there is not much spare room left above until it touches the long-term range high at 0.6870, the trend is short-term bullish, so it’s quite possible it could continue higher.

AUD/USD Daily Chart 

The Aussie is showing mild bearish divergence with the Relative Strength Index (RSI) momentum indicator (red dashed lines on chart above). This occurs when the price reaches a new high but the RSI fails to. The non confirmation is a bearish sign and indicates mild underlying weakness. It suggests AUD/USD is at risk of pulling back. 

If a correction evolves it is likely to find support at around 0.6800 (July high), followed by 0.6736. 

AUD/USD is in a short-term uptrend since the September 11 low and given it is a principle of technical analysis that “the trend is your friend” the odds favor a continuation higher eventually – despite the bearish divergence with RSI. 

A break above the 0.6839 (September 19 and yearly high) would confirm a continuation of the uptrend to a target at the 0.6870 level (December 2023 high). 

• AUD/USD grips gains above 0.6800 as investors see one more large Fed interest rate cut.
•  Investors await Fed Harker’s speech for fresh guidance on interest rates.
• The RBA is unlikely to cut interest rates this year.

The AUD/USD pair clings to gains above the round-level support of 0.6800 in Friday’s European session. The Aussie asset remains broadly firm amid growing speculation that the Federal Reserve (Fed) could deliver one more bumper interest rate cut in its monetary policy meeting in November.

The Fed pivoted to policy normalization on Wednesday when he announced a 50 basis points (bps) rate cut decision, pushing interest rates to 4.75%-5.00%. The signal was clear that the Fed is focused in preventing further deterioration in the labor market conditions. On the interest rate guidance, the Fed dot plot shows that policymakers see the federal fund rate heading to 4.4% by the year-end, which indicates the central bank will cut rates further by at least 25 basis bps.

However, traders see a 75-bps decline in the remaining two policy meetings in November and December, in which one interest rate decision would be a 50-bps rate cut. According to the CME FedWatch tool, the likelihood of the Fed reducing interest rates by 50 bps to 4.25%-4.50% in November is 43%, higher than the 37% recorded on Thursday.

In today’s session, investors will keenly focus on the speech from Philadelphia Fed Bank President Patrick Harker’s speech at 18:00 GMT for fresh interest rate guidance.

In the Asia-Pacific region, the Australian Dollar (AUD) remains firm as upbeat Aussie Employment data weigh on market expectations for the Reserve Bank of Australia (RBA) to start reducing interest rates this year. The Australian Employment report for August showed that employers hired 47.5K fresh workers, higher than estimates of 25K but almost similar to the prior release of 48.9K, downwardly revised from 58.2K.

Meanwhile, the Australian Dollar didn’t react much to People’s Bank of China’s (PBoC) interest rate decision announced in the Asian session in which the central bank left its one-year and five-year Loan Prime Rates (LPRs) unchanged at 3.35% and 3.85%, respectively, as expected. Historically, any economic development in China influences the Australian Dollar significantly being close trading partners.

The Australian Dollar (AUD) is likely to trade in a sideways range of 0.6780/0.6840. In the longer run, there is still room for AUD to rise further, but there may not be enough momentum for it to challenge 0.6870, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD rangebound between 0.6780 and 0.6840

24-HOUR VIEW: “Yesterday, we held the view that AUD ‘could trade in a range between 0.6735 and 0.6800.’ We did not anticipate the subsequent volatility, as after dipping to 0.6738, AUD soared and broke above the solid resistance zone of 0.6820/0.6825 (high of 0.6839). AUD pulled back from the high, closing at 0.6815 (+0.75%). The pullback in overbought conditions suggests AUD is unlikely to weaken much further. Today, AUD is more likely to trade in a sideways range of 0.6780/0.6840.”

1-3 WEEKS VIEW: “We indicated yesterday (19 Sep, spot at 0.6770) that ‘there is room for AUD to rise further, but the 0.6820/0.6825 solid resistance zone may be difficult to break.’ However, AUD easily took out the resistance zone, as it soared to a high of 0.6839. While there is still room for AUD to continue to rise, at this time, it may not have enough momentum to challenge to significant resistance at 0.6870. On the downside, a breach of 0.6740 (‘strong support’ level was at 0.6715 yesterday) would mean that the current upward momentum has faded.”

• AUD/USD trades firmer around 0.6810 in Friday’s early Asian session. 
• Fed officials pencilled in more rate cuts by year-end in their latest economic projections. 
• Investors will monitor the PBoC interest rate decision, Fed’s Harker speech on Friday.  

The AUD/USD pair trades on a stronger note near 0.6810 during the early Asian session on Friday. The uptick of the pair is bolstered by the softer US Dollar (USD) amid the prospects of further rate cuts by the US Federal Reserve (Fed) this year. Later on Friday, the Fed’s Patrick Harker is set to speak. 

The divergence of monetary policy between the Reserve Bank of Australia’s (RBA) higher for longer rate narrative and the Fed’s easing cycle is likely to influence the major pair in the near term. The two-day Fed meeting ended with an unexpected 50 basis points (bps) rate cut. The new dot-plots suggest a gradual easing cycle, with the 2024 median revised to 4.375% versus the 5.125% projection in June. Market expectations of the Fed rate cut might continue to undermine the Greenback and act as a tailwind for AUD/USD for the time being. 

On the other hand, investors see the RBA keep its Official Cash Rate (OCR) unchanged at the upcoming meeting, but expect the rate cut later this year. Commonwealth Bank of Australia (CBA) analysts moved their expected timing of the first RBA rate cut from November 2024 to December 2024, with 25bp cut expected. “Recent strength in employment growth coupled with still relatively hawkish rhetoric from the RBA Governor means we now see December as the more likely month for the start of normalising the cash rate,” said CBA analysts. 

The People’s Bank of China’s (PBoC) will announce its interest rate decision on Friday. Meanwhile, any development surrounding the weakness in the Chinese economy could weigh on the China-proxy Australian Dollar (AUD) as China is Australia's largest trading partner. 

• AUD/USD has posted a new high for the year, and could extend higher. 
• It is showing bearish divergence with RSI so there is a risk of a pull back evolving.
   

AUD/USD reaches a new high for 2024 at 0.6839 on Thursday, after the leg higher that began at the September 11 lows extends. It has since edged back down marginally to just above the 0.6800 mark. 

AUD/USD Daily Chart 

Price is showing mild bearish divergence with the Relative Strength Index (RSI) momentum indicator (red dashed lines on chart above). This happens when the price reaches a new high but the RSI does not. The non confirmation is a bearish sign as it indicates mild underlying weakness. It suggests AUD/USD is at risk of pulling back. 

If a correction evolves it is likely to find support at around 0.6800 (July high), 0.6755 or 0.6698 (August 22 swing low). 

AUD/USD is in a short-term uptrend, however, since the September 11 low and given it is a principle of technical analysis that “the trend is your friend” it will probably continue higher eventually – despite the bearish divergence with RSI. A break above the 0.6839 yearly high would confirm a continuation of the uptrend to a target at the 0.6870 level (December 2023 high). 

• AUD/USD surges to near 0.6840 in the aftermath of the Fed’s policy announcement.
• The Fed cut its key borrowing rates by 50 bps to 4.75-5.00%.
• Australian Employment data for August came in better than expected.

The AUD/USD pair posts a fresh eight-month high near 0.6840 in Thursday’s European session. The Aussie asset strengthens as the US Dollar (USD) retreats in the aftermath of the Federal Reserve’s (Fed) monetary policy announcement.

The Fed delivered its first interest rate cut decision in more than four years in which it reduced borrowing rates by 50 basis points (bps) to 4.75%-5.00%. Market participants were certain that the Fed would pivot to policy normalization but were split over the likely interest rate cut size.

Historically. Fed’s dovish interest rate decisions result in a sharp increase in foreign flows to emerging markets and risk-perceived currencies. The market sentiment is upbeat due to the Fed’s bumper interest rate cut. S&P 500 futures have posted significant gains in the European session. The US Dollar Index (DXY), which tracks the Greenback’s value against its major peers, falls back from the weekly high of 101.50 to near 100.60.

Meanwhile, policymakers see the federal fund rate heading to 4.4% by year-end, suggesting that there will be another 50-bps decline in key borrowing rates. On the contrary, the CME FedWatch tool shows that the central bank will cut 75 bps in the remaining monetary policies this year.

On the Aussie front, upbeat Australian Employment data for August has strengthened the Australian Dollar (AUD). The report showed that Australian employers hired 47.5K fresh workers, higher than estimates of 25K but almost similar to the prior release of 48.9K, downwardly revised from 58.2K. The Unemployment Rate remains steady at 4.2%, as expected.

• AUD/USD soared near 0.6800 after the Fed's larger than expected cut.
• The Fed signalled three additional cuts in 2024.
• Unemployment projections where revised higher

The AUD/USD pair surged towards the 0.6800 level following the Federal Reserve's unexpected decision to cut interest rates by 50 basis points, surpassing the anticipated 25 basis points reduction. This aggressive monetary easing reflects the Fed's strengthened confidence in achieving its 2% inflation target, as the Federal Open Market Committee (FOMC) acknowledges that inflation is making substantial progress while remaining somewhat elevated. 

Looking ahead, the Fed has indicated the possibility of two to three additional 25 basis point rate cuts in the upcoming meetings of 2024, underscoring the committee's cautious stance amidst an uncertain economic outlook. The FOMC remains vigilant to risks on both sides of its dual mandate, carefully assessing incoming data and the evolving balance of risks before making further adjustments.

 While unemployment projections have slightly risen, the overall message from the FOMC is one of confidence and careful optimism, as they strive to maintain economic stability and ensure that inflation trends sustainably towards their long-term objective.

• AUD/USD is extending its recovery move from the September 11 lows. 
• It will probably go a little higher until it reaches the July or August highs.
   

AUD/USD continues rallying as it climbs from the bottom it formed on September 11. The new up leg has broken above a key trendline for the correction of the August rally. This is a bullish sign and suggests it is now in a short-term uptrend. 

AUD/USD Daily Chart 

Given it is a principle of technical analysis that “the trend is your friend” the Aussie is likely to continue going higher. It could match or almost match the 0.6824 August 29 high. The resistance level at 0.6799 ( July high) is another potential target and could provide firm resistance to bulls. 

Momentum, as measured by the Relative Strength Index (RSI) is slacking off a little and suggests some caution before adopting an overly bullish stance, however, it is broadly mirroring price, a fact that is supportive of the current mini-rally.

The Australian Dollar (AUD) is set to advance towards 0.6825, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD to move towards 0.6825

24-HOUR VIEW: “Although AUD rose sharply on Monday, we indicated yesterday (Tuesday) that ‘upward momentum has not increased much.’ However, we were of the view that it ‘could continue to rise, but any advance is likely part of a higher range of 0.6725/0.6765.’ AUD then traded in a 0.6742/0.6769 range, closing largely unchanged at 0.6756 (+0.06%). Further range trading still seems likely today, expected to be in a range of 0.6725/0.6775.”

1-3 WEEKS VIEW: “We continue to hold the same view as yesterday (17 Sep, spot at 0.6745). As highlighted, the recent price action has resulted in a tentative buildup in upward momentum. However, AUD must break and remain above 0.6765 before an advance to 0.6825 can be expected. The likelihood of AUD breaking clearly above 0.6765 will increase in the next few days as long as 0.6700 is not breached.”

• AUD/USD gains positive traction for the third straight day amid modest USD weakness.
• Bets for a 50 bps Fed rate cut and a positive risk tone undermine the safe-haven buck.
• China’s economic woes warrant caution for bulls ahead of the crucial Fed policy decision. 

The AUD/USD pair scales higher for the third straight day – also marking the fifth day of a positive move in the previous six – and climbs to over a two-week high, around the 0.6775-0.6780 region during the early European session on Wednesday. The momentum is sponsored by the emergence of fresh US Dollar (USD) selling, which continues to be weighed down by dovish Federal Reserve (Fed) expectations. 

In fact, the markets are currently pricing in a greater chance of an oversized 50 basis points (bps) Fed rate cut move at the end of a two-day policy meeting later today. This keeps a lid on the overnight recovery in the US Treasury bond yields, led by the upbeat US Retail Sales figures. Apart from this, a generally positive tone around the equity markets caps the USD recovery from its lowest level since July 2023 and acts as a tailwind for the AUD/USD pair. 

The Australian Dollar (AUD), on the other hand, continues to draw support from the Reserve Bank of Australia's (RBA) hawkish stance. The RBA Governor Michele Bullock reiterated last Thursday that bringing inflation down to the target band of 2-3% remains the central bank's highest priority and it was premature to contemplate near-term rate cuts as inflation remained too high. This further contributes to the bid tone surrounding the AUD/USD pair. 

That said, persistent worries about a slowdown in China – the world's second-largest economy – might hold back traders from placing aggressive bullish bets around the China-proxy Aussie. Investors might also prefer to move to the sidelines and wait for the highly-anticipated FOMC monetary policy decision before positioning for an extension of the AUD/USD pair's recent goodish rebound from the 200-day Simple Moving Average (SMA) support.

• AUD/USD has broken above a trendline and established a new short-term uptrend. 
• It will probably extend to the August highs. 

AUD/USD has begun a new leg higher after bottoming out on September 11. This new leg has broken above a key trendline for the correction of the August rally – a bullish sign – which, amongst other things, suggests it is now in a short-term uptrend. 

AUD/USD Daily Chart 

It is a principle of technical analysis that “the trend is your friend” which suggests the Aussie is likely to continue higher. It will probably match or almost match the 0.6824 August 29 high. The resistance level at 0.6799 ( July high) might, however, slow it down along the way. 

Momentum, as measured by the Relative Strength Index (RSI) is mirroring price, a fact that is supportive of the current mini-rally.

The Australian Dollar (AUD) could continue to rise, but any advance is likely part of a higher range of 0.6745/0.6765. In the longer run, AUD must break and remain above 0.6765 before an advance to 0.6825 can be expected, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

An advance to 0.6825 can be expected

24-HOUR VIEW: “While AUD gained 0.70% (0.6752) yesterday, upward momentum has not increased much. Today, it could continue to rise, but any advance is likely part of a higher range of 0.6725/0.6765. In other words, AUD is unlikely to break clearly below 0.6725 or above 0.6745.” 1-3 WEEKS VIEW: “AUD dropped to 0.6622 last week and then rebounded. There has been a tentative buildup in momentum. From here, AUD must break and remain above 0.6765 before an advance to 0.6825 can be expected. The likelihood of AUD breaking clearly above 0.6765 will increase in the next few days as long as 0.6700 is not breached.”