AUD/USD Breakout Hinges on Thursday's US Inflation Data

The AUD/USD currency pair has broken above the 0.7200 level to reach its highest point since early May, benefiting from a combination of factors including buoyant risk appetite and hawkish RBA pricing.

As the yen continues to strengthen against the US dollar, it is helping to soften the pressure on the greenback and amplify the upside response in AUD/USD.

The Aussie has been more responsive to upside catalysts than other currencies, with a correlation of +0.88 over five days, +0.54 over 20 days, and +0.60 over 60 days with risk appetite.

However, the key breakout test for AUD/USD will come on Thursday with the US inflation data release, which could determine whether the pair's break higher morphs into a breakout or an abrupt reversal.