I don’t like the shape of the global economy but you can’t ignore the resilience of the Australian dollar. It’s also highly correlated with US stocks and that should add some upside ahead of the Fed next week.
AUD/USD has easily cleared the key retracement levels after last week’s fall and it is poised to challenge the April/July highs.
A break could spark a moonshot to 1.06 or 1.08.
The North American high was 1.0423 and strong offers are seen ahead of 1.0450 with stops above. More offers at 1.0500.
A more skeptical trader might choose to exploit the relative growth differences and minimize risks with a GBP/AUD short.