AUD/USD is in a period of consolidation after a rally overnight on the back of Fed Chair Yellen who surprised markets with a more dovish tone than was expected.
Yellen: Appropriate for Fed to proceed cautiously with rate hike
“Caution in normalisation was “especially warranted” as the Fed’s ability to act is “asymmetric”. The AUD is approaching some key technical resistance around the 0.7655 level,” as explained by analysts at ANZ. The greenback was sold off heavily across the board but, the Aussie was able to sail through the 0.76 level and a move towards 0.7850 over the short-term can not be written off, especially should U.S. data start to really underperform. We now await the nonfarm payroll report and the ISM Manufacturing report to be being released on Friday.
AUD/USD levels
AUD/USD is technically en-route to R1 at 0.7680 although shortterm RSI and momentum indicators point to a phase of consolidation currently. On a break of R1, R2 is located at 0.7725 and R3 at 0.7745. As mentioned, 0.7850 and 17th June high cannot be ruled out at this stage. To the downside, 0.7200 is the psychological level on the wide through 0.7238 and the 200 dma. 0.7380 and double top level needs to give way first and 0.7500 before that.
(Market News Provided by FXstreet)