The Aussie dollar holds around the pre-pandemic low of 0.6680 as the impressive bullish continuation unfolds. The bullish pennant, which developed from early to mid-May, revealed a strong bullish continuation which was largely influenced by the move lower in US inflation.
Price action holds at elevated levels after intra-day pullbacks were repelled before testing the 0.6644 level that previously capped higher prices. In a week where that sees a notable drop-off in the number of ‘high importance’ data, volatility may wane and the US dollar may stand to benefit from a gradual recovery. Conditions of lower volatility tend to see a move towards higher yielding currencies, something that could see the US and Kiwi dollars find some respite.
