The Aussie continues to defy the risk-off flows by appreciating further on the back of positive fundamentals (Aus jobs). The breach of the 2018 descending trendline is undoubtedly also supporting the technical picture, as it’s the fact that sellers appear unlikely to achieve much out of the rotation seen off 0.73 last week. The daily structure continues to scream ‘buy-me’ on weakness, while the hourly chart is also looking very appealing to engage in buy action.
As usual, I’ve drawn for readers of my report the key areas of interest if you are looking to be a buyer today. On the topside, I wouldn’t count on much resistance to be found until 0.73 round number. If on a daily basis this market can close above 0.7315, that’s going to be more fuel for technicians to support the trend.
When looking at the volumes, we can also see that Wednesday’s push came on increasing volume, which reinforces the narrative of buy on weakness for at least a re-test of 0.73 if not higher. It’s also worth noting that the Aussie vs US 5-year yield spreads are trading at the highest levels since early Sept, so watch that space too.