AUD/USD surges to fresh yearly tops near mid-0.7700s
The AUD/USD pair continued gaining traction on Friday and jumped to fresh yearly tops near 0.7755-60 region during the early European session.
The pair built on built on last week's recovery move from sub-0.7600 level and has now surged nearly 200-pips, of which over 150-pips gains have come in the past four trading session. Fading expectations of a faster Fed rate tightening cycle, as depicted by the recent slump in the US Treasury bond yields, has been benefitting higher-yielding currencies - like the Aussie.
This coupled with easing concerns of an economic slowdown in China provided an additional boost to the China-proxy Australian Dollar and contributed to the pair's strong upsurge to the highest level since the US Presidential election in Nov. 2016.
• Fitch affirms China at ‘A+’, outlook Stable
It, however, remains to be seen if the pair continues with its strong up-move or traders look to take some profits off the table ahead of today's important US macro data - monthly retail sales and inflation figures, which could act as a game changer for the pair's near-term trajectory.
• US: CPI and retail sales amongst market movers today – Danske Bank
Technical levels to watch
A follow-through buying interest has the potential to continue lifting the pair further towards Nov. 2016 highs resistance near 0.7775-80 region ahead of the 0.7800 handle. On the flip side, any pull-back from higher levels now seems to find support near 0.7730-25 region, below which the pair could correct back below the 0.7700 handle towards 0.7685 strong horizontal support.
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