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Talking Points:
- AUD/USD Technical Strategy: Flat
- Aussie Dollar digesting gains after rising to 4-month high vs. US Dollar
- Waiting for trend support break to align positioning with fundamentals
The Australian Dollar is digesting gains after rising to the highest level in nearly four months against its US namesake. The move higher broke double-top resistance in play since late June hinting that the recovery from May lows has scope to extend to a challenge of the April top above the 0.78 figure.
Near-term resistance is at 0.7760, the August 11 high, with a break above that on a daily closing basis opening the door for a test of the April 21 peak at 0.7835. Alternatively, push below resistance-turned-support at 0.7631 paves the way for run at rising trend line support, now at 0.7566.
Technical positioning seems to favor the upside but fundamental considerations appear to disagree. A resolution of this disparity needs confirmation on a break of trend line support, which could play out following the release of July’s jobs report. In the interim, opting for the sidelines seems prudent.
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