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The Australian Dollar is on "long-term breakout watch".
This is the message from Bank of America's technical strategy team, which explains that an "impulsive recovery" is intact.
"Since peaking in 2011 at about 1.10, the long-term trend in AUDUSD was down into the 2020 COVID induced lows of about .55. A sharp three wave rebound in 2020-2021 preceded a multi-year consolidation in the .60-.70 area. This month AUDUSD is breaking out to a higher high for the year," says a new FX strategy note from BofA's technical strategists, released Friday.
The observation is that the Australian Dollar is "flirting with a bullish trend line breakout."
The research says a monthly close above 0.6650 would imply a breakout.
"There is always another level or trendline somewhere and the next major hurdle thereafter would be the 100wk SMA and down-trend line near psychological resistance of 0.7000," it adds.
The impulsive recovery from the April low and subsequent rally is now seen to have pushed into some long-term and key resistance levels.
"Each level that breaks pushes more in favour of the long-term wave count, (C) up. This wave (C) can imply upside to 0.7460, 0.8000 and possibly the 0.84s in the next 1-2 years. Should AUDUSD reverse below the 3Q25 lows at .6415, then we'd revisit this count," says the research note.
