AUD/USD jumps to 1-week highs as USD tumbles on Yellen

AUD/USD climbed quickly from 0.7900 to 0.7962, reaching the highest level since August 17 amid a decline of the US dollar across the board. The greenback weakened after the release of Janet Yellen speech. Fed’s Chair didn’t mention the economy, neither signals about the path of monetary policy and weakened the dollar. 

The Dollar Index fell sharply from 93.20 to 92.62, the lowest since August 4. Equity prices initially reacted to the upside, but now are moving lower. The Dow Jones is up 0.20%, far from the highs. US bonds strengthened after the speech. 

AUD/USD move higher, still challenging 0.7950

The pair moved modestly away from daily highs and at the moment, trades around 0.7940. It holds a strong bullish tone, but so far it has been unable to hold above 0.7950, a key short-term resistance. The aussie needs to consolidate on top to clear the way to more gains. 

If the pair is rejected again from above 0.7950 a correction seems likely. Support levels are seen at 0.7920 (European session high), 0.7880 (Aug 23 low) and 0.7865 (Aug 24 low).