AUD/USD rises further to four-week highs above 0.6730

• US Dollar continues to slide against antipodean currencies.
• Australian Dollar is the top performer among major currencies this week.
• AUD/USD is trading at its highest level since May 11.
• The AUD/USD continued to rise and reached a fresh four-week high near 0.6740. The pair has held onto strong weekly gains, supported by a hawkish Reserve Bank of Australia (RBA) and a weaker US Dollar. 

The Greenback remains under pressure on Friday, particularly against antipodean currencies, which are outperforming. While the RBA and Bank of Canada have raised rates, expectations are that the Federal Reserve (Fed) will hit the pause button next week. At the same time, an improvement in market sentiment is also helping to boost demand for the AUD and NZD.

On Friday, China reported that the Consumer Price Index rose 0.2% YoY and the Producer Price Index was at -4.6% YoY. The numbers show that the impact of the reopening remains limited. Low inflation numbers keep the door open to more stimulus from Chinese authorities.

Best week in months for the Aussie 

The RBA's rate hike and Governor Lowe's comments about persistent inflation testing the board's patience offered a boost to the Australian Dollar. Risk-on flows and technical factors added fuel to the AUD/USD rally. Weak data from China was mostly ignored.

The AUD/USD has risen almost 150 pips during the week, marking its best performance since January. The price is currently testing the 20-week Simple Moving Average (SMA), and a clear close above it would suggest that more gains are on the table. In the daily chart, the AUD/USD is testing the 100-day SMA and is starting to consolidate above the 0.6715/20 resistance area.

The technical outlook for the Aussie is positive. However, the main risk at the moment could come from a reversal in risk flows and a hawkish surprise from the Federal Reserve next week.

AUD/USD weekly chart