The AUD/USD pair closed the previous week modestly higher and preserved its bullish momentum on Monday. As of writing, the pair was trading at its highest level since mid-September at 0.7344, rising 0.5% on a daily basis. 

In the absence of significant fundamental drivers and high-tier macroeconomic data releases, rising copper prices seem to be providing a boost to the commodity-related AUD at the start of the week. Currently, copper futures on COMEX are up 1.5% on a daily basis. AUD/USD has opened on a firm footing and closes in on the multi-week high it set at 0.7340 on Friday. Nonetheless, while the aussie trades below the resistance line at 0.7361, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, allows for further falls.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

AUD/USD held above the 0.7300 mark on Friday. Consolidating above this level could see the pair target 0.7400 next, leaving the AUD bears impinged.

ACGBs has underperformed USTs in run higher in yield, providing some additional support for the AUD beyond risk sentiment.

AUD/USD has broken out resistance at 0.7312/17, which suggests a short-term correction higher to the 2021 downtrend at 0.7365, which we then expect to cap the market. Thereafter, support is seen at 0.7291/87 initially, below which would confirm a turn back lower and retest of 0.7179/70 lows.

Beneath the 0.7179/70 lows should then clear the way for a test of major support starting at 0.7126/06, which is the ‘neckline’ to a major potential top and stretching down through 0.7053 to 0.6991. Below here would complete a large and substantial top to mark a significant change of trend lower. 

AUDUSD

Oct 11 2021