A remarkable streak is underway in the AUD/USD market, with the currency pair surging for an incredible eleventh consecutive day. This upward trajectory is set to secure the second weekly gain in a row, primarily fueled by a weakening US dollar and growing expectations of a Fed rate cut. However, it's not just the greenback that's feeling the heat; the AUD is also holding its own against other major currencies.
The pair reached a new 2 ½ month high on Friday, breaking through the formidable barrier at 0.6640 (200-week moving average and Fibonacci 76.4% retracement of the 0.6706/0.6421 decline). But here's where it gets controversial: the bulls may face some headwinds, as daily technical indicators are flashing overbought signals. Friday's profit-taking could also contribute to a potential easing of prices.
Investors are now eagerly awaiting the release of the delayed US September PCE price index, a key inflation gauge for the Fed. This data will provide crucial insights for US policymakers ahead of next week's policy meeting.
The bullish momentum is firmly entrenched, with multiple moving average bull crosses and strong positive momentum indicators. Ideally, dips should find support above the 0.6600 zone (broken Fibonacci 61.8% level, hourly higher low, and top of the hourly Ichimoku cloud). Any deeper pullback should be contained by the top of the daily cloud and the broken Fibonacci 50% level (0.6560), allowing for a healthy correction and providing better entry points for those looking to join the strong bullish market. The ultimate target remains 0.6706 (the 2025 peak reached on September 17).
Resistance levels: 0.6660, 0.6688, 0.6706, 0.6730.
Support levels: 0.6630, 0.6600, 0.6560, 0.6541.
And this is the part most people miss: the market is a complex dance of expectations and technicals. While the current outlook is bullish, it's essential to keep an eye on potential reversals and the impact of economic data releases. So, what do you think? Will the AUD/USD continue its upward march, or are we due for a correction? Feel free to share your thoughts and predictions in the comments below!
