AUD/USD Forecast: Nearing The Monthly High And Poised To Rally Towards 0.740

AUD/USD Current Price: 0.7313

• Moderna reported progress in its covid vaccine, stocks surged, providing support to the AUD.
• RBA’s Governor Philip Lowe dismissed chances of negative rates in Australia.
• AUD/USD is nearing the monthly high and poised to rally towards 0.7400.

The AUD/USD pair surged towards the upper end of its previous weekly gain, ending Monday with modest gains above the 0.7200 level. The Australian dollar surged alongside equities, which in turn were supported by renewed hopes about a coronavirus vaccine. Following the Pfizer announcement last week, it was the turn of Moderna to report progress on its covid-prevention treatment.

RBA’s Governor Philip Lowe hit the wires at the beginning of the day, and his words provide support to the local currency, as he repeated that negative rates in Australia are still extraordinarily unlikely, adding that economic growth is linked to keeping the pandemic under control. The central bank will release the Minutes of its latest meeting this Tuesday, although no surprises are expected from the document, after Lowe’s comments.

AUD/USD Short-Term Technical Outlook

The AUD/USD pair holds on to gains, trading near the monthly high at 0.7339. The 4-hour chart shows that it advanced above a still flat 20 SMA, while the larger ones advance modestly below the shorter one. In the meantime, technical indicators hold near their daily highs within positive levels, although they have lost directional strength. The pair could grab bullish momentum once beyond 0.7345, the immediate resistance level.

Support levels: 0.7290 0.7250 0.7210   

Resistance levels: 0.7345 0.7380 0.7420

View Live Chart for the AUD/USD

Image sourced from Pixabay