AUD/USD headed to the April 2016 high at 0.7836?

Ross J Burland FXStreet

Currently, AUD/USD is trading at 0.7657, down -0.16% on the day, having posted a daily high at 0.7681 and low at 0.7651.

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AUD/USD has been recovering from the recent risk-off environment earlier in the month where the pair dropped from 0.7748 double top to 0.7587 lows before starting to recover.

The stalling of the Trump agenda was undermining equities and driving risk-off sentiment but a reverse of this came with new hopes of tax reforms in the US enabling the Aussie to base and readjust on a northerly trajectory again up to test 0.7680 resistance. A recovery in metals and a correction in iron ore particularly had favored the commodity currency as well, although this recovery in the risk mood has only left AUD/USD about flat so far.

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"Further range-trading seems likely, from say 0.7550/70 to 0.7725/40. Lending support should be a bounce in Australia’s trade surplus in Feb, a mostly positive tone from the RBA and resilient investor sentiment in Asia," suggested analysts at Westpac, adding, "Capping AUD/USD on probes above 0.77 though should be potential for US yields to press higher over the week and the persistent doubts over the sustainability of the past year’s bulk commodity price rally, which have kept the Aussie below the fair value levels shown across."

AUD/USD levels

AUD/USD has recovered from the 2017 support line at 0.7586 and analysts at Commerzbank expect a retest of the 0.7740/78 resistance area (the February as well as November 8th highs). " Failure here will target the 0.7549 200 day ma. Should a rise as well as daily chart close above the 0.7778 level be seen, the April 2016 high at 0.7836 would be in focus. The market remains capped by the 0.7778/0.7850 2016 highs and the 38.2% retracement, but it is possible that it is base building."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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