In continuation of its 1.8% increase on Friday, the Australian dollar maintains its strong bullish attitude and reaches a five-month high early on Monday.
Renewed risk appetite boosted the Australian dollar, and a new stock market rise on Monday throughout the Asian session added to the upbeat mood.
As the sharp increase in interest rates over the past year begins to affect high inflation, traders are also anticipating the release of the US December inflation report on Thursday.
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They are hoping that consumer prices will continue to decline. With numbers at or below expectations, traders are anticipating a 25 basis point increase at the Fed’s next meeting.
Daily studies are still fully bullish, while the weekly closure above the 200DMA is providing more encouraging indications (0.6844).
Today’s break below 0.6915 (50% retracement of 0.7661/0.6170 fall) opens door towards psychological 0.70 barrier and 0.7076/91 (weekly cloud base / Fibo 61.8%).
Broken Fibo barrier reverted to the first level of support at 0.6915, then 0.6886 (the highs from January 4 and 6), and the 200DMA, which should contain lengthy declines and keep bulls in action.
