AUD/USD: Losing Conviction Ahead of RBA?
AUD/USD continues to lack conviction as it presses on towards the 0.77 handle with failures there again earlier and offers sending the major commodity currency back to the half way point on the 0.7 handle.
April comes with the RBA meeting on Tuesday, and the Aussie will likely be a topic of discussion given the course it has taken and the steepness of the rally over a relatively short time frame.
While 0.77 is proving a toughnut to crack, we are well above the RBA's desired 0.65c levels mentioned last year and subsequently this year again by board members and the price, while struggling to continue much higher at the moment, remains better bid technically in bullish territory still. That, coupled with Yellen's recent rhetoric and an exposure of further downside to come in the greenback will be an alarming factor for the RBA while at the same time, there is strong Japanese demand for foreign bonds and key commodity prices still well above January lows, as noted by analysts at Westpac who argued that it is too soon to call the high on AUD/USD.
AUD/USD needs to make a convincing break on 0.77 and close above 0.7680 on a daily basis to renew the upside trend. Gains to 0.7850 (38.2% retracement of move down from 2014) could be on the cards ahead of 0.8030/50 as suggested by Karen Jones, chief analyst at Commerzbank earlier in the week. Should the bear take the lead from here, 0.7650 was a resistance this week on two occasions which has been penetrated today with lows at 0.7634. Below here, 0.7510 is next key target below the 200 sma on the 1hr time frame at 0.7577.
(Market News Provided by FXstreet)