AUD/USD is testing its 100-day moving average near 0.7050. A Wall Street rally pushed the pair back above 0.7000, erasing Monday's losses. A firm break higher would open the path toward 0.7200 and the May highs at 0.7250-77. August has historically been the worst month for AUD/USD in the past two decades.
AUD/USD pushed back above 0.7000 after a rally on Wall Street added fresh momentum to the pair. The move erased Monday's losses and put the focus back on the 100-day moving average as the next hurdle.
The bounce follows a rough stretch for the aussie. Softer inflation data at the end of July dampened hopes of a Reserve Bank of Australia rate hike this month, dragging AUD/USD down last week. But intervention in USD/JPY then weakened the dollar across the major currencies, helping the pair recover.
Hopeful optimism around US-Iran developments, bond yields coming off the boil, and equities looking to go on a tear are combining to test whether AUD/USD can break higher. Still, whether that combination holds remains to be seen.
A firm break above the 100-day moving average, seen at 0.7050 currently, would open room for AUD/USD to run toward 0.7200. The May highs at 0.7250-77 are eyed next. The pair has traded in a bind between its key daily moving averages for the past two months, and Wall Street's rally could be the catalyst needed to end that stretch.
Even so, August has historically been the worst month for AUD/USD over the past two decades. The aussie has still defied that seasonal trend in each of the past two years during August trading.
Source: Investinglive
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