AUD/USD climbs to fresh six-week highs on the day
The aussie is continuing to quietly make its climb higher as AUD/USD buyers pick up from where they left off last week. The pair is tracking to fresh highs just above 0.6870 now as price eclipses daily resistance around 0.6865.
As it stands, the technical momentum continues to side with buyers and a move towards the 100-day MA (red line) @ 0.6911 looks entirely plausible at this stage.
I’ve highlighted last week that the yields spread play is arguing in favour of upside momentum towards 0.7000 potentially so let’s see how things are shaping up now:
As you can see, AUD/USD is starting to adjust higher to reflect the tightening in the yields spread (in favour of the aussie) so at this stage I reckon the currency may take things a bit slower from here and eye the 100-day MA before potentially revisiting 0.7000.
So far, headlines are also continuing to work in the aussie’s favour with the PBOC having reduced the RRR last week adding another reason for the currency to stay buoyed.