AUD/USD looking at bullish breakout to multi-year highs
AUD/USD is grinding higher towards downtrend resistance dating back to the middle of 2023, putting traders on alert for a potential bullish breakout to multi-year highs.
Adding to the potential bullish setup, MACD and RSI (14) continue to provide bullish signals on momentum. As indicated on the bottom pane, the rolling 10-day negative correlation between AUD/USD and USD/CNH has strengthened to -0.9, indicating the Aussie dollar and Chinese yuan have often been moving in the same direction against the US dollar recently. That’s noteworthy as USD/CNH tumbled to fresh multi-year lows last week.
If the price breaks and closes above the downtrend located around .6830, consider initiating longs with a stop beneath for protection. Above, former market peaks at .6871 and .6893 are the first levels of note. If they were to go, it would put AUD/USD on track for a retest of the multi-year downtrend dating back to the pandemic highs in early 2021.
With limited event risk on the economic calendar and likelihood the RBA will retain its hawkish stance at Tuesday’s monetary policy meeting, it adds to the sense that upside may be easier than downside in the near-term.
Good luck!
DS
Adding to the potential bullish setup, MACD and RSI (14) continue to provide bullish signals on momentum. As indicated on the bottom pane, the rolling 10-day negative correlation between AUD/USD and USD/CNH has strengthened to -0.9, indicating the Aussie dollar and Chinese yuan have often been moving in the same direction against the US dollar recently. That’s noteworthy as USD/CNH tumbled to fresh multi-year lows last week.
If the price breaks and closes above the downtrend located around .6830, consider initiating longs with a stop beneath for protection. Above, former market peaks at .6871 and .6893 are the first levels of note. If they were to go, it would put AUD/USD on track for a retest of the multi-year downtrend dating back to the pandemic highs in early 2021.
With limited event risk on the economic calendar and likelihood the RBA will retain its hawkish stance at Tuesday’s monetary policy meeting, it adds to the sense that upside may be easier than downside in the near-term.
Good luck!
DS
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