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AUD/USD extends recovery from 11-month lows, eyes 0.7550

5/11/2018, 10:33:44 AMMarket Analysis
AUD/USD extends recovery from 11-month lows, eyes 0.7550

The Australian Dollar was the top performer among major currencies. A decline of the US dollar and an improvement in risk appetite with easing tensions on Emerging Markets helped the Aussie. A lower-than-expected CPI reading in the US added pressure to the greenback.

The AUD/USD pair is having the best day in months. During the American session extended gains and near the end it was trading at 0.7535/40, at 3-day highs, consolidating strong gains. The pair moved all day with a bullish bias, extending the rally that started yesterday from 0.7411 (lowest level since June 2017).

The move to the upside was also supported by a rally in AUD/NZD that gained more than 150 pips. The pair claimed from 1.0660 to levels on top of 1.0800. The initial boost came after the RBNZ decision and then, it was driven by a stronger Aussie.

AUD/USD Technical outlook

The short-term picture is clearly bullish, according to Valeria Bednarik, Chief Analyst at FXStreet. “The pair surpassed the 23.6% retracement of its latest decline and in the 4 hours chart, indicators head higher almost vertically, nearing overbought readings, as the price moves well above a now flat 20 SMA.”

The next Fibonacci resistance comes at 0.7565 notes Bednarik and notes that is the level to surpass, in order to see a steeper recovery up to 0.7610.