AUD/USD continues to push higher above 0.7700 into the new year

• AUD/USD extends rally to fresh multi-year highs on Thursday.
• US Dollar ındex stages modest rebound ahead of US data.

Following a brief consolidation phase around 0.7700, the AUD/USD regathered bullish momentum and touched its highest level since April 2018 at 0.7742. As of writing, the pair was up 0.6% on a daily basis at 0.7730.

Thin trading conditions ahead of the New Year holiday seem to be causing the volatility to increase in short bursts. Nevertheless, financial markets are largely expected to turn subdued during the American trading hours and AUD/USD could struggle to make a decisive move in either direction until next week.

Later in the day, the US Department of Labor will publish its weekly Initial Jobless Claims data. Meanwhile, the US Dollar Index is flat on the day at 89.68.

AUD/USD 2021 outlook

AUD/USD Price Forecast 2021: Winning the covid crisis insufficient for the aussie to withstand Chinese boomerang.

"The weekly chart provides a big-picture view of AUD/USD movements and the critical levels to watch out for. The Aussie has surpassed both the 50-week and 200-week Simple Moving Averages for the first time since early 2018, a bullish sign," notes FXStreet Analyst Yohay Elam. "On the other hand, it is entering overbought territory – a Relative Strength Index of 70 or higher – on the weekly chart, thus indicating a substantial correction."

Technical levels to consider