AUD/USD – clocks fresh 2-1/2 month high, breaches key resistance

AUD/USD pair jumped to 0.7676, highest since May 3 on improved risk sentiment following upbeat China data release.

Trades above confluence of Fibo resistance

The currency pair trades above key Fibo retracement level of 0.7643 (161.8% Fib expansion of 0.6827-0.7243-0.6973) – 0.7653 (61.8% of May 2015 high – Jan 2016 low). Aussie had a hard time breaching the same on June 24th and twice this week.

However, the positive surprise offered by China data, finally managed to push the pair through the stiff resistance. The pair is now struggling to sustain above 0.7272 (76.4% of 0.7835-0.7145). It remains to be seen if the strength remains intact till NY closing as we have another data risk ahead - US advance retail sales release, which if strong, could help American dollar stage a comeback.

AUD/USD Technical Levels

Acceptance above 0.7272 (76.4% of 0.7835-0.7145) could yield a rally to 0.73 (zero figure). A break higher would expose May 3 high of 0.7713. On the other hand, a failure to sustain above 0.7643 (161.8% Fib expansion of 0.6827-0.7243-0.6973) – 0.7653 (61.8% of May 2015 high – Jan 2016 low) would open doors for a re-test of 0.76 handle, under which losses could be extended to 0.7561 (10-DMA).