- AUD/USD consolidates above 0.7250 after a 3.6% weekly advance.
- The risk rally post-US elections has boosted the AUD.
- The Australian dollar faces strong resistance at 0.7300.
Australian dollar’s bearish reversal from six-week highs at 0.7290 witnessed earlier on Friday has been contained at 0.7200 and the pair bounced up again to consolidate above 0.7250 approaching the weekly close.
Australian dollar rallies on the post-US election
The AUD/USD has gone through its best week over the last months, with the pair set for a 3.6% weekly gain, buoyed by the risk rally post-US election. The prospects of a Democrat government with the Senate controlled by the Republicans to block large spending plans or any attempt to hike taxes has been welcomed by the investors who have sent stock markets surging and the safe-haven US dollar to multi-month lows.
The better than expected US Non-Farm Payrolls report, which has shown a 638K increase on employment in October, beating expectations of a 600K increase has provided mild support to the USD. The pair dipped to session lows at 0.7230 after the release of the employment report although it managed to pare losses shortly afterwards.
AUD/USD faces strong resistance at 0.7300 – UOB
From a technical point of view, the FX Strategy team at OUB warns about an important resistance area at 0.7300: “While the major resistance at 0.7300 is still intact (overnight high of 0.7289), the strong surge in momentum (AUD closed higher by a whopping +1.49%) indicates that 0.7300 is unlikely able to hold the current advance in AUD. That said, there is another strong resistance at 0.7345 and only a clear break of this level would indicate AUD is ready to challenge the year-to-date top at 0.7413.”
Technical levels to watch
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