AUD : Aim Higher

(Tue, 23 Feb 2021). The S&P 500 closed in the red on Monday, its fifth consecutive decline marking the longest stretch of daily losses since early 2020. Technology shares declined sharply with the Nasdaq Composite, which posted a 2.46% decline as rising Treasury yields pressured equity valuations. The Dow Jones Industrial Average managed to gain 0.09% while the small-cap focused Russell 2000 index dropped 0.69% on the day.

Elsewhere, gold and silver prices rose along with industrial metals like copper and zinc. The weaker US Dollar helped propel precious metals higher as investors continued to strengthen their outlook on the global recovery. XAG/USD outpaced gold with a 3.18% gain against the yellow metal’s 1.44% rally. WTI crude oil prices rose over 2% as supply issues support energy prices.

AUD/USD DOLLAR TECHNICAL OUTLOOK

The Australian Dollar has made a sharp move higher against the US Dollar, with AUD/USD breaking above the 0.7900 psychological level earlier this week. The cross is now eyeing the 161.8% Fibonacci extension from the January to February move. Prices look set for a possible extension higher as the MACD indicator flashes a bullish signal with its increasing divergence from the signal line. However, the Relative Strength Index (RSI) is in overbought territory, indicating a possible pullback into consolidation, or perhaps even a reversal lower although the trend remains bullish.

AUD/USD DOLLAR TECHNICAL OUTLOOK

While not as impressive of a move, the Australian Dollar has rallied to challenge a descending trendline from the August swing high against the New Zealand Dollar. AUD/NZD breached above the 78.6% Fibonacci retracement from its January – February move on Monday and momentum appears to be holding strong with an increasing MACD divergence. RSI remains in neutral territory, just above the 63 mark.

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