AUD/USD Breaks Out to Fresh High Since Early June
The AUD/USD pair has broken out of its recent downtrend, hitting a fresh high since early June. The pair has gained nearly 0.50% in value today and is on track to register gains for the seventh week in a row. This bullish trend is attributed to the weakening US Dollar (USD), which has been trading near a three-month low due to receding bets for an immediate rate hike by the Federal Reserve (Fed).
Despite geopolitical uncertainties stemming from the US-Iran standoff over the Strait of Hormuz, bulls seem unaffected, suggesting that the path of least resistance remains to the upside. The Relative Strength Index (14) near 67 indicates stretched but still constructive momentum, backed by a mildly positive Moving Average Convergence Divergence (MACD) reading above zero.
The technical setup validates the near-term positive outlook for the AUD/USD pair. However, a sustained move beyond the 78.6% Fibonacci retracement at 0.7188 is needed to open up higher recovery targets. Initial support lies at the 61.8% retracement at 0.7119, ahead of a stronger structural floor formed by the 50.0% retracement at 0.7070 and the nearby 100-day SMA at 0.7069.