The AUD/USD currency pair on Monday extended last week’s gains to top 0.6920 and head towards the current 7-week highs of about 0.6938. The currency pair had bottomed at around 0.6840 to trigger the latest rally, which has now wiped nearly all he losses incurred prior to the rebound.

The currency pair continues to trade in a highly volatile ascending wedge, which indicates a hotly contested battle between the bulls and the bears. The bulls appear t have the upper hand for now.

AUD/USD Fundamentals Overview

From a fundamental perspective, the AUD/USD currency pair is trading at the back of a relatively quiet week due to the holiday period. However, a few rounds of economic data will still be trickling through. On Monday, Australia’s Private Sector Change for November missed the (MoM) estimate of 0.3% with 0.1% while the (YoY) change edged lower to 2.3% versus 2.5% in the previous month.

In the US, durable goods orders ex-transportation for November missed the expected change of 0.2% with 0.0% while durable goods orders ex-defense beat 0.0% with 0.8%. In general terms, durable goods orders for November missed the expectation of 1.5% with -2% while non-defense capital goods orders also came short of 0.2% expected with 0.1%.

The Chicago Fed National Activity Index beat -0.09 with 0.56 while New Home Sales change for November also surprised with (MoM) change of 1.3% versus an expectation of -0.3%. The 3-month bill, the 6-month bill, and the 2-year note edged higher from 1.54%, 1.55% and 1.601% to 1.555%, 1.57%, and 1.653%, respectively.

AUD/USD Technical Analysis (the 60-min Chart)

Technically, the AUD/USD currency pair appears to be trading within an ascending wedge, which indicates a short-term bullish bias in the market sentiment. The currency pair recently made a XABCD double-bottom reversal pattern, which triggered the current reversal in the trend.

Therefore, the bulls will be targeting short-term profits at around 0.6929 or higher at 0.6938. On the other hand, the bears will hope for a quick pullback towards 0.6911 or lower at 0.6901.

AUD/USD Technical Analysis (the Daily Chart)

In the daily chart, the AUD/USD currency pair appears to have recently made a triple-bottom reversal, which triggered the formation of an ascending channel. This indicates that the bulls are attempting to take control although in the grand scheme of things the bears still hold the cards as illustrated using the larger descending channel.

Therefore, the bulls will be targeting long-term profits at around 0.6999, 0.7093, or higher at 0.7185. On the other hand, the bears will be looking to pounce by targeting profits at around 0.6823, 0.6756 or lower at 0.6671.