AUD/USD continues scaling higher, hits fresh multi-month tops

The AUD/USD pair continued scaling new highs through early NA session and is now placed at over 2-year highs near the 0.7840 region.

The pair regained traction near the 0.7800 handle and turned positive for the seventh consecutive session, shrugging off a modest pickup in the greenback recovery. The ongoing retracement in the US Treasury bond yields, amid fading expectations of any additional Fed rate hike action in 2017, was seen benefitting higher yielding currencies - like the Aussie. 

Adding to this, today's upbeat Chinese macro data, and positive sentiment around commodity space, was also seen lending support to the China-proxy/commodity-linked Australian Dollar. 

Meanwhile, the US Dollar recovery move seems to have lost momentum following the release of weaker than expected Empire State Manufacturing Index, which retreated sharply to 9.8 in July from a two-year high level of 19.8 touched in June. Hence, lack of any strong follow-through USD buying interest further collaborated to a mild bid tone surrounding the major.

It, however, remains to be seen if the pair is able to able to build on the up-move or near-term overbought conditions continue to keep a lid on the pair's up-move ahead of RBA monetary policy meeting minutes, due for release during early Asian session on Tuesday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: “The overall positive tone prevails despite the limited upward momentum seen in the 4 hours chart, as the price remains well above a bullish 20 SMA, whilst the RSI indicator consolidates around 79. Above the mentioned high, the pair has scope to extend its advance towards 0.7910 February 2015 monthly high.”