The Australian Dollar Edges Up as US Dollar Struggles. Can AUD/USD Continue Higher?

Australian Dollar, AUD/USD,US Dollar, CAD, NOK, NZD, S&P 500, Omicron – Talking PointsThe Australian Dollar might have found a base going into year endAPAC equities were mixed after another record high for the S&P 500Commodities went higher today. Will it lift AUD/USD momentum?The Australian Dollar had another positive day today. Higher iron ore and crude oil prices also helped to underpin the other commodity linked currencies of CAD, NOK and NZD. The US Dollar index (DXY) was slightly higher in Asia after overnight losses.Australia’s ASX 200 index made a new high for the month above 7520, but closed almost flat. The S&P 500 made another all-time high in the US session overnight. Chinese equities were positive on the day, while Hong Kong and Japanese indices were in the red. US Treasuries maintained the higher yields seen in the North American session, with the 10-year trading near 1.55%. Australian government bonds also saw higher rates with their 10-year yielding 1.63% after trading at 1.54% yesterdayThe impacts of the spread of the Omicron variant of Covid-19 continues with a third day of over 1 million cases being reported globally. 1.61 million new cases were reported yesterday around the world.Coming up, US President Joe Biden is expected to talk with Russian President Vladimir Putin on Thursday as concerns remain over the build-up of Russian military capabilities near the Ukraine border. Data wise, the US will see manufacturing PMI and construction spending numbers later today.AUD/USD TECHNICAL ANALYSISThe Australian Dollar remains in an ascending trend channel after making a new for 2021 at 0.69932 earlier this month. This was just above the November 2020 low of 0.69913. These 2 levels and the pivot point and recent low at 0.70903 and 0.70825 respectively, may provide support.The short term simple moving averages (SMA) of 10,14 and 21-days lie below the price and have positive gradients. This could suggest that there is short term bullish momentum evolving. However, the medium and long term SMAs, represented by the 55 and 200-day SMAs, are above the price with negative gradients. This might indicate that the underlying medium and long-term bearish momentum remains intact. A break below the short term SMAs may see the ascending trend channel broken. A move above the medium and long term SMAs could see the continuation of the trend.Resistance on the top side might be at the previous highs of 0.72726, 0.73680 and 0.75560Chart created in TradingView— Written by Daniel McCarthy, Strategist for DailyFX.comTo contact Daniel, use the comments section below or @DanMcCathyFX on Twitter
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