AUD/USD: consolidates ahead of a break of the 0.77 handle?

AUD/USD is currently consolidated in a tight range in the absence of catalysts while markets shifted gears back to the search for yield post the U.S. presidential debate.

Investors view a Clinton victory as a safe bet and observers and the press have awarded Clinton the victory post yesterday's debate that also painted a rosier economic backdrop for the U.S. allowing for a lift on Wall Street and higher yielding asset classes. The Aussie remains better bid although capped at 0.7700. However, as analysts at Westpac explained, while further gains to around 0.77 are possible during the month ahead, driven in part by the faltering US dollar and yield-chasing flows, the AUD is losing energy (perhaps a reflection of its declining yield advantage). We now await RBA assistant Edey speaking in the Tokyo open ahead of key U.S. data.

AUD/USD levels

With spot trading at 0.7665, we can see next resistance ahead at 0.7666 (Daily Open), 0.7666 (Weekly High), 0.7671 (Daily High), 0.7678 (Daily Classic R2) and 0.7688 (Monthly High). Support below can be found at 0.7664 (Daily Low), 0.7661 (Hourly 20 EMA), 0.7658 (Daily Classic R1), 0.7639 (Hourly 100 SMA) and 0.7630 (Daily Classic PP).

Meanwhile, Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, technical readings also favor an upward extension, although the momentum is limited, as the price stands above a flat 20 SMA, while technical indicators head modestly higher within positive territory, but below previous highs. "An extension beyond the mentioned daily high should see the pair quickly extending up to 0.7735, September 8th high, en route to 0.7770."