AUD / USD jumps to new 3 1/2 week highs at 0.7370

• The aussie’s recovery from 0.7170 reaches levels close to 0.7400.
• The AUD recovers due to the rise in commodity prices.
• AUD / USD rally capped at 0.7365 – Credit Suisse.

The AUD it has recovered approximately 0.9% so far today and is on track to close its best daily performance in recent months. The pair accelerated its uptrend, after breaking above the 0.7330 resistance area, to hit 0.7370 for the first time since mid-September.

Higher Commodity Prices Fuel AUD’s Recovery

The appreciation of the AUD has been supported by a strong rebound in commodity prices. Crude oil has hit another multi-year high, with WTI consolidating above $ 80, while iron ore, one of Australia’s top exports, appreciated amid increased demand from China as the main ports of the country opened after a national holiday.

Beyond that, the market has welcomed the relaxation of COVID-19 restrictions in New South Wales, one of the most populous states in the country. The reopening of bars, restaurants and gyms in Sydney after a four-month lockdown has increased the bullish momentum in the AUD, to offset the overall strength of the USD.

AUD / USD Likely Capped at 0.7365 – Credit Suisse

From a broader perspective, Credit Suisse’s currency analysis team remains skeptical of further AUD strength: “AUD / USD has broken resistance at 0.7312 / 17, suggesting a higher short-term correction to the 2021 downtrend at 0.7365, which we then expect to cap the market. Thereafter, support is initially seen at 0.7291 / 87, below which it would confirm a pullback to the downside and retest the lows of 0.7179 / 70 ”.

Technical levels