Wondering what’s happening with the Aussie – greenback pair? At this point, AUD/USD is trading at 0.7574, up 0.05% on the day, with a daily high at 0.7579 and low at 0.7570.
More upside in the dollar and yields, experts say. USD resurgence banged on AUD/USD investors eager to gather the boons of the overstretched long position. Momentum has taken a negative turn, Westpac analysts emphasise. Their target is 0.7510.
The US session was a combo of lower stocks against a strong dollar and further jumps in yields, with the US 10-year Treasury yields rising from 2.45% to 2.50%, and the 2-year yields following an ascending trend from 1.28% to 1.33%. The market will be engaging in a Fed hike this month and US data seem supportive in this direction.
Westpac analysts warn that the risk of retesting 0.6825-30 low persists, however, the price action off highs last year suggests that a broader consolidation is starting to take shape. Weekly momentum supports further rebounds intra-month/inter-week.
Delving more into technicalities, Wespac experts report on the occurrence of a solid in the 0.7145-60 area, with recent dynamic rebounds. These rebounds show a tendency to move upward, above 0.7500, which means that an inter-week top may form. As the daily momentum is not rolling over yet, this top still needs to be confirmed. The bias though, experts note, is for building for a slide to 0.7300-50. Any slight drop back under 0.7450 has the potential to trigger early retracements.The style and depth marking these pullbacks will determine the strength of the following upswing.
In conclusion, spiraling consolidation patterns persist. There’s a well-shaped interim base at 0.7145-60. The current up-move is characterised by limited upside. The probability of a squeeze occurring towards 0.7570 is to be considered, and chances of a deep corrective are pretty high now. A break below 0.7450 could lead to early pullbacks.