- AUD/USD refreshes multi-month highs on Monday.
- DXY struggles to retrace its daily drop.
With the heavy selling pressure on the greenback remaining unabated on Monday, USD denominated pairs preserved their bullish momentum. The AUD/USD pair reached its highest level since late September at 0.7967 during the European session before going into a consolidation phase. As of writing, the pair was trading at 0.7958, gaining 0.52% on the day.
Despite heightened expectations of the Fed making another 25bps rate hike in March, the buck is having a rough time finding demand as investors remain focused on European currencies. Later in the session, the pair's price action is likely to stay subdued with the trading volume thinning out amid the bank holiday in the U.S. due to the observance of Martin Luther King Day. At the moment, the US Dollar Index is down 0.55% on the day at 90.12.
In the early trading hours of the Asian session on Monday, the University of Melbourne released the TD Securities Inflation data, which dropped to 2.3% from 2.7% on a yearly basis in December. On Tuesday, New Motor Vehicle Sales from Australia is going to be released but the data is unlikely to have a significant impact on the pair. The only noteworthy data from the U.S. will be the NY Empire State Manufacturing Index.
The RSI indicator on the daily graph continues to float above the 70 mark, suggesting that the pair is still technically oversold. However, unless the DXY makes a decisive correction, the pair could extend its gains. 0.8000 (psychological level) could be seen as the initial hurdle ahead of 0.8090 (Sep. 20 high) and 0.8125 (Sep. 8 high). On the downside, supports could be seen at 0.7900 (daily low/psychological level), 7820 (20-DMA) and 0.7750 (200-DMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.