Aussie Rebound Builds As Yield Advantage Supports Bullish Bias

AUD Heat Map Shows Broad Aussie Rebound

Aussie is bouncing. AUD/USD is up 0.33% while AUD is also firmer against EUR (0.41%), GBP (+0.30%), and JPY (0.32%). It’s not just the US Dollar weakness. Hopefully it’s not a lower higher the Aussie is putting in but actually a trend reversal.

AUD/USD Is Higher, With The Aussie Also Gaining Against EUR, GBP and JPY

Australia-US Yield Gap Widens as Curves Shift Higher

Both the Australian and US yield curves have shifted higher over the past month, with Australia’s long-end being firmer. Markets are still pricing in sticky inflation and a tiger RBA backdrop. Overall this AUD positive once risk sentiment doesn’t disappear fully.

Australian Yields Remain Above US Yields Across The Curve, While Both Markets Show a Clear Rise From One Month Ago

AUD/JPY Renko Attempts Trend Resumption

AUD/JPY is showing a bit of life trend wise as the FX pair crossed back above its 50-SMA after being below it just briefly on the Renko chart. So the trend direction is there. We just need a bit more momentum. The RSI is back above 50 which is a good sign but the Z-Score SMA needs to start to trend back higher. We also need a positive flip on the Supertrend to help confirm a resumption of the upward trend.

AUD/JPY is Holding Near Its 50-SMA, but Weak Z-Score SMA Momentum Shows the Aussie Bid Is Losing Some Bite

AUD/USD Renko Rebound Faces Supertrend and 50-SMA Tests

The Aussie has tumbled and found some support around the 0.7102 level when looking at the Renko chart. We are now seeing a couple of green bricks which is a positive sign but not confirmation on the end of the pullback. The Z-Score SMA is trending higher which is a positive sign but we also need to see the RSI back above 50 and the bricks back above the 50-SMA as well as a positive flip on the Supertrend to help confirm that AUD/USD will retest 0.72775 recent highs.

AUDUSD Attempts a Short Term Bounce After Declining From 0.7277, But Positive Momentum Remains Soft

The Verdict

Current Trend Direction: Bullish

Bias: Positive

Support Levels: 0.6833,0.71015,0.70720

Resistance Levels: 0.72715, 0.74070

Medium Term Path: AUD/USD is still positive in the medium term but there needs to be proof that the rebound has legs. Aussie-US yields remain wide enough to give AUD some lift but I still want to see AUD/USD back above its 50-SMA as well as the RSI above 50 with a Supertrend flip. I’m not asking for alot. Once that happens 0.72715 looks much clearer to me.