AUD / USD consolidating gains at five-week highs above 0.7400

• The AUD extends the rally to five-week highs at 0.7440.
• An increased appetite for risk has propelled the AUD.
• AUD / USD is heading towards 0.7450.

The AUD rallied for a fifth day in a row on Friday, extending its rebound from the 0.7170 lows in late September to the five-week highs at 0.7440, before retreating to consolidate at the 0.7415 / 20 zone.

Risk appetite has driven the AUD

Better market sentiment, with equity markets surging for a second day in a row supported by upbeat quarterly earnings from major banks and better-than-expected US retail sales have favored the risk-sensitive Aussie, what weighs on safe assets like the US dollar.

Beyond that, the relaxation of COVID-19 restrictions in Sydney, the country’s most populous city after a four-month lockdown, has enhanced optimism. Australian authorities have pledged that the required quarantine for vaccinated travelers arriving in NSW would not be necessary from 1 November as the state of NSW will achieve a first vaccination dose rate of 80 % Saturday.

In addition, the Chinese central bank finally assured that Evergrande’s risks to the financial system are “controllable” and unlikely to spread, easing concerns about a chain reaction affecting the financial sector of the second largest economy. biggest in the world.

AUD/USD rumbo a 0.7450 – UOB

According to the UOB currency analysis team, the pair is heading towards 0.7450: “There is no change in our opinion even though the AUD might first consolidate for a couple of days before heading towards 0.7450. On the downside, a break out of the ‘strong support’ at 0.7350 (the level was at 0.7325 yesterday) would indicate that the current positive phase has come to an end. “

Technical levels