The Australian dollar keeps strong bullish stance and hits five-month high in early Monday, in extension to Friday’s 1.8% advance.
Renewed risk appetite lifted Aussie, with fresh rally in stocks during the Asian session on Monday, adding to positive sentiment.
Traders also focus on Thursday’s release of US Dec inflation report, hoping that consumer prices will continue easing, as sharp increase in interest rates during last year starts to impact high inflation, with numbers at / below expectations to contribute to expectations for 25 basis points hike on Fed’s next meeting.
Such scenario would further deflate the US dollar and give fresh boost to Aussie’s recovery from 0.6170 (2022 low, posted on Oct 13).
Daily studies remain in full bullish setup, with additional positive signals seen from weekly close above 200DMA (0.6844).
Today’s break through 0.6915 (50% retracement of 0.7661/0.6170 descend) opens way towards psychological 0.70 barrier and 0.7076/91 (weekly cloud base / Fibo 61.8%).
Broken Fibo barrier reverted to initial support at 0.6915, followed by 0.6886 (Jan 4/6 tops) and 200DMA, which should contain extended dips and keep bulls in play.
Res: 0.6946; 0.7000; 0.7076; 0.7091.
Sup: 0.6915; 0.6886; 0.6841; 0.6798.
