AUD/USD Rallies For A Fourth Consecutive Session, Wipes RBA-Inspired Losses
AUD/USD is on track to post a fourth straight day of gains and has fully erased losses that resulted from the RBA meeting earlier this month. The pair is seen approaching critical resistance that will be important for the medium-term trend.
The bulk of today’s gains in the currency pair came on the release of Fed Chair Yellen’s testimony to Congress. Yellen reiterated the Fed’s intention to gradually raise rates and to start normalizing the balance sheet later this year.
Yellen also added that given the neutral rate is quite low, the Fed won’t need to raise rates “all that much further” so that monetary policy is neither encouraging or discouraging economic activity.
AUD/USD traded near 0.7656 resistance prior to the release of the text that contained Yellen’s testimony and rallied towards 0.7680 following. On a 4-hour chart, the pair has shown some exhaustion after the initial surge as a bearish hanging man candle has printed.
The US dollar index (DXY) responded in a volatile manner to Yellen’s testimony but is seen trading flat shortly ahead of the North American close.
The dollar has declined against most of its counterparts on the back of Yellen’s testimony. The only currencies that have managed to post some gains versus the greenback are the euro and Swiss franc.
Yellen will testify again tomorrow, to the Senate Banking Committee, although her comments are not likely to have as much of an impact unless her rhetoric various significantly from today.
Other releases that stand to cause an impact are PPI figures and unemployment claims out of the United States, both scheduled for release at 08:30 EST.
AUD/USD is nearing a major resistance confluence derived from two trendlines.
A rising trendline that originates from the low posted in early June was broken following the RBA meeting. The pair is seen nearing the trendline in an attempt to retest it.
The second trendline dates back to a high posted in April 2016. The declining trendline is best seen on a daily chart and has capped the exchange rate three times this year already. The two trendlines fall within close proximity of each other to create resistance that offers a high probability of a turn lower.
|AUD / NZD 1.07073 / 1.07018
|AUD / USD 0.78241 / 0.78214
|CAD / JPY 98.991 / 98.963
|EUR / AUD 1.4047 / 1.40434
|EUR / CHF 1.03539 / 1.03509
|EUR / GBP 0.70983 / 0.70968
|EUR / JPY 133.66 / 133.644
|EUR / USD 1.0988 / 1.09862
|GBP / AUD 1.97908 / 1.97857
|GBP / CHF 1.45866 / 1.45825
|GBP / JPY 188.32401 / 188.284
|GBP / USD 1.54809 / 1.54785
|NZD / JPY 88.917 / 88.871
|NZD / USD 0.73091 / 0.73062
|USD / CAD 1.22916 / 1.22887
|USD / CHF 0.94232 / 0.94201
|USD / JPY 121.655 / 121.635