audusd28082020The AUD/USD pair extends its five-day winning streak into the European session, hitting the highest levels since December 2018 at 0.7313. The spot remains on track to book a huge weekly gain. Following a brief phase of consolidation overnight, the major extended its steady rise and surpassed the highs of 0.7290, reached after the US Federal Reserve (Fed) Chairman Jerome Powell’s Jackson Hole speech.

The advance is the pair is mainly driven by the broad-based US dollar weakness. The greenback faces a double-whammy from Fed Powell’s adoption of the average inflation targeting framework on one hand. The pause in the US Treasury yields rally amid renewed risk-aversion also benefited the spot, boosting the attractiveness of the Aussie dollar as an alternative higher-yielding asset. Further, the gains in the S&P 500 futures also lend support to the upside in AUD/USD. The bulls now look at 0.7329 en route the psychological barrier of 0.7350. On the downside, the daily spot at 0.7255 could be tested. A break below the latter could bring the support at 0.7230 in play.