AUDUSD

Is the Rally Sustainable for AUDUSD Above 15-Month Highs?

AUDUSD consolidates at the 15-month highs as the rally in the Aussie dollar continues as the reopening of the economies around the globe after the coronavirus lockdown boost investors sentiment for a faster than expected recovery. USD is under pressure as investors dump safe-haven assets and shift their attention to more risky assets. Aussie dollar and emerging markets currencies cheered earlier on the week encouraging coronavirus vaccine news and the extension to government relief programs, the JobKeeper and JobSeeker.

Rising tensions between China and USA after Washington ordered the closure of the China consulate in Houston, Texas over spying allegations. China immediately warned that it would retaliate.

Meanwhile, S&P Global Ratings is out with its report on the Australian economy, warning for the downside risks after the Aussie government announced the 2020-21 budget.

On the economic data front, Australia Bank’s Business Confidence came in at -15 below the expectations of -8 in the second quarter. The government now forecasts that the unemployment rate will be at 8.75% in 2020-2021. Analysts expect the Aussie economy to contract by 3.8% in 2020, marking the first recession since 1991.

AUDUSD Price Technical Analysis

AUDUSD is 0.24% higher at 0.7156 close to yesterday’s highs which is also the 15-month highs. Bulls are in the driver’s seat, but the RSI 14 index has entered in the overbought zone since July 21, and a correction can’t be ruled out. 

On the upside, initial resistance for AUDUSD pair stands at 0.7159 the daily top. Next hurdle will be met at 0.7178 the high from yesterday’s trading session. Next supply area is at 0.7210 the high from April 15, 2019.

On the other side, the immediate support for AUDUSD stands at 0.7133 the daily low. Below 0.7133, the next target for bears will be at 0.7017 the low from July 21 trading session. Next support for the pair would emerge at 0.6861 the 50-day moving average.    

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AUDUSD Daily Chart

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