There was a bit of a retreat in the past hour or so, with the pair falling from 0.6839 to around 0.6800 currently as the dollar saw some light bids to start the session. Still, price is up 0.2% to 0.6800 and buyers are still somewhat buoyed after yesterday's technical break higher:
The pair ran into resistance around the 61.8 Fib retracement level at 0.6767 in November, before getting caught in and around its 100-day moving average (red line). But after Fed chair Powell's less hawkish remarks yesterday, risk trades soared and the aussie is benefiting from that.
The currency is also getting some additional push from China optimism, as re-opening hopes are building further this week.
For now, the key technical point for buyers is to try and hold above the broken resistance noted above at 0.6767. That will keep the more bullish momentum going with eyes on the 200-day moving average (blue line) next at 0.6924 currently.
While European stocks have opened higher, risk tones are fairly tepid now with S&P 500 futures turning flat and Treasury yields also creeping a little higher. 10-year yields are up 2 bps to 3.63%, so that is helping to alleviate some pressure off the dollar for now.
It seems like we may have to wait and see how Wall Street takes to the post-Powell narrative, with US non-farm payrolls tomorrow also a focus point.
