AUDUSD Bull Flag Setup

After trading towards .7100 a few weeks ago, the AUDUSD has traded with a relative “bid tone” and is holding onto some strong technical levels near term. Although the pair has “underperformed” risk assets like stock market indices (due to ongoing Covid lockdowns in Australia) the pair has recovered the last couple weeks and may be ready to move higher. Grega Horvat also feels the AUDUSD is ready to rally (see this weekend’s week ahead video here) and we do feel that the bull flag pattern setup supports this. As long as the .7334 38% Fibonacci retracement holds the risk for a move back to the 200dma seems likely. A daily close below the .7300 level would risk this setup not playing out. We should also note that Australian employment is stated for release Thursday morning down under.