The Australian dollar has been given plenty of reasons to rally against the US dollar recently, but hasn’t.
The RBA seems optimistic on where the economy is heading, and commodity prices, particularly for those Australia has in abundance, have been marching higher.
However, despite all that, the AUD/USD has yet to climb back above 77 cent level, running into a wall of sellers whenever it ventures towards that level.
That can be clearly seen in the hourly chart below.
77 cents, for the moment, appears a bridge too far for the Aussie dollar bulls, perhaps dissuaded by recent US dollar strength driven by news that US president Donald Trump will release details of “phenomenal” tax reforms in the next week or two.
However, while the Aussie’s upward momentum has come to a halt in recent days, currency strategists at the National Australia Bank think it’s only a matter of time until the Aussie will be trading with a 77-handle should this week’s Australian jobs report for January not produce a horror show.
“Our short term fair value model is now nudging 0.78 cents,” strategists at the bank wrote.
“While broader USD volatility will obviously remain very important — and for now means we are not revising our AUD/USD forecasts — the coming week’s key domestic events will likely need to be weak indeed to prevent AUD/USD clicking onto a 0.77 handle.”
The AUD/USD currently trades at .7662.