AUD/USD: eyes on 0.8018 200 week MA

Currently, AUD/USD is trading at 0.7909, down -0.09% on the day, having posted a daily high at 0.7919 and low at 0.7909.

AUD/USD has been continuing on the bid in a weak USD environment where the US dollar index was down 0.5% on the US shift. Iron ore prices were also supportive to the Aussie following the bullish RBA minutes induced rally overnight. "Markets, priced for ‘low for ever', are being forced to rethink too, and after the bank of Canada, now it's the RBA which is in the spotlight," explained Kit Juckes, an economist at Societe Generale. 

Market wrap: dollar drops to a 10-month low - Westpac

However, analysts at Westpac noted that the pace of gains has accelerated to an unsustainable rate and suggested a breather is needed ahead of 0.8000 for today.

AUD/USD 1-3 month: 

Their forward outlook suggests that much of AUD/USD's gains have been driven by broad US dollar weakness. "But there has also been a partial recovery in Australia's key commodity prices, after very steep declines in April and May. However, beyond multi-week gains, a firmly on hold RBA is likely to keep a lid on AUD/USD, easing to 0.74 by year-end," explained the analysts.

AUD/USD levels

AUD/USD has eroded the top of its converging range and surged higher, explained analysts at Commerzbank. "AUD/USD eroded its initial key resistance at the 0.7836/50 the 2016 high and Fibo. The break above here targets the 0.8018 200 week ma and then the 0.8162/66 May 2015 peak and 50 % retracement. Please note there is a 13 count on the daily and we will wait to buy the dips," the analysts argued. 

Meanwhile, Valeria Bednarik, chief analyst at FXStreet, notes that in the 4 hours chart, technical indicators have begun retreating from extreme overbought territory, but the price's pullback has been shallow, whilst the 20 SMA continues heading sharply higher below the current level, all of which maintains the risk towards the upside. "Beyond today's high,  the rally could extend up to the 0.8060/70 region during the upcoming sessions, where the pair presents multiple monthly highs and lows from the last decade," Valeria Bednarik noted.