AUD/USD extends gains to test 0.7750, fresh 9-week tops

• DXY weakness underpins.
• Rises in sync with gold prices.
• Eyes on US data.

The AUD/USD pair extends its vertical rise from 0.7725 levels and tests the midpoint of 0.77 handle, as the bulls remain unstoppable amid holiday-thinned markets.

AUD/USD: DXY extends week-long sell-off

The Aussie trades with sizeable gains, as broad-based US dollar selling gains traction in early Europe, with markets digesting the latest series of downbeat US fundamentals, while higher gold prices continue to boost the sentiment around the resource-linked AUD. Gold reaches 3-week high amid thin trading

The greenback remains weighed by the renewed concerns over the monetary policy convergence, now that the RBA remains on track to hike rates next year while Fed could under-deliver on its rate hike trajectory.

Meanwhile, the pair remains well above the 50% retracement of its October/December slide and manages to regain the 61.8% retracement of the same decline at 0.7745. The spot now awaits the US pending home sales and consumer confidence numbers for fresh momentum.

AUD/USD Technicals

Valeria Bednarik, Chief Analyst at FXStreet noted: “In the 4 hours chart, a bullish 20 SMA converges with the mentioned Fibonacci support, reinforcing it, while the RSI turned modestly higher, now at 66, both supporting additional gains ahead, despite the absence of bullish momentum, a result of the limited volume seen over the last few sessions. Support levels: 0.7695 0.7640 0.7600. Resistance levels: 0.7745 0.7770 0.7800.”