Australia welcomes "Freedom Day", and the Australian dollar rises to a new one-month high! Target or aim 0.74

On Monday (October 11), the Australian dollar rose to a one-month high against the backdrop of a surge in commodity prices. At the same time, the Australian dollar was also supported by the relaxation of restrictions on the epidemic in Australia’s most populous state of New South Wales.

Sydney reopens

Sydney’s cafes, gyms and restaurants welcomed fully vaccinated customers on Monday after being locked down for nearly four months, because Australia’s goal is to start coexisting with the coronavirus and gradually reopen with a high vaccination rate.

Dominic Perrottet, Governor of New South Wales (NSW), told reporters in the state capital of Sydney: "I think this is a day of freedom. This is a day of freedom. We are leading the country out of this. A pandemic, but it will be a challenge."

Perrottet warned that infections will increase after the reopening, and virus-free states such as Western Australia and Queensland are paying attention to the situation of the epidemic because of concerns that the health system may be overwhelmed.

Perrottet has announced the end of the New South Wales blockade and strongly supports the reopening of Sydney. Since the outbreak of the highly contagious Delta virus in mid-June, more than 5 million residents of Sydney have been severely restricted.

The epidemic has since spread to Melbourne and Canberra, forcing these cities to lock down, although the number of cases in New South Wales is declining.

As the scope of vaccination expands, Australia plans to gradually return to normal, allowing fully vaccinated residents to freely enter and leave the country from November. Australia closed its international borders in March 2020, helping to keep its coronavirus population at a relatively low level.

The outlook for the Australian dollar

OCBC Bank analysts believe that the Australian dollar against the US dollar may target 0.7400 after closing above 0.7300 last week.

"Australian Treasury bond yields underperformed U.S. bonds, providing the Australian dollar with some additional support in addition to risk sentiment," the analyst added.

In addition, Credit Suisse analysts predict that the downtrend line of approximately 0.7365 in 2021 will limit its rebound.

He said that the Australian dollar has broken through the resistance level 0.7312/17, which means that it will be revised upwards to the 2021 downward trend line 0.7365 in the short term. Since then, the support level was initially seen at 0.7291/87, below this level will confirm a fall to a lower level, and retest the 0.7179/70 low.

A break below the low of 0.7179/70 should clear the way for another test of the main support level of 0.7126/06 and extend it down to the 0.7053 and 0.6991 levels. A break below the latter marks a significant change in the trend towards a downward trend.

(Australian dollar against the dollar daily chart)

GMT+8 22:26, the Australian dollar was quoted at 0.7367 against the US dollar.