Aussie Uptrend Resuming?

AUDUSD is at an interesting technical juncture here which is worth exploring. The correction from 2021 highs, framed by a bear channel formation has run into support once again at the .7564 level. Buying pressure has now seen price breaking above the bear channel top with price quickly approaching the .7824 level. Given the bull trend of the last twelve months, the recent corrective channel can be viewed as a bear flag, suggesting a continuation of the upside move.

Now, .7824 could well prove to be the defining level because if selling pressure kicks in at the level, this could create a head and shoulder pattern, and the potential for a reversal lower. However, with the retail community almost 90% short, a break of this level could pave the way for a move back up to the .80 highs and beyond.

Key Data to Watch

A mostly quiet data sheet this week for both Australia and the US. Aussie retail sales overnight on Tuesday are the only print of note and should come in strong given the better fundamental conditions of the last month. Aside from that, expect the Aussie to stay tethered to risk sentiment. With equities continuing to move higher and USD remaining under pressure, the outlook looks favourable for AUD here.

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