Aussie On the UpThe Australian Dollar continues its attempted breakout today, fuelled by ongoing USD weakness. The shift in perspective on the Fed sets AUD up as a prime candidate for strength in coming months. With risk flows improving and commodities prices gaining, AUD looks well positioned to benefit from further USD weakness as traders’ focus on US rate cuts grows. Looking ahead this week, the next round of US data inputs holds the potential to drive the pair higher should we see fresh USD selling consequently. RBA in FocusAhead also this week will be the RBA meeting minutes, due tonight. At the last meeting the bank held rates unchanged while signalling that further tightening might still be needed depending on how inflation progresses. While no further hikes are expected at this point, the broader focus remains on the Fed and USD. As such, any uptick in dovish RBA expectations shouldn’t act as too much of a hindrance to AUDUSD upside which is likely to only be disrupted now by fresh USD strength. Risk Flows SupportiveIndeed, given AUD’s correlation to risk appetite. A shift lower in USD across Q1 2024 in line with growing rate cut expectations means that AUD is likely to be a strong performer across the early part of the year. With commodities prices set to increase, AUD should remain well supported through cross-asset flows making this a pair to keep an eye on in Q1. Technical ViewsAUDUSDThe rally in AUDUSD has seen the market continuing the breakout above the bear trend line from YTD highs. Price is now once again probing above the .6681 level which, if held, should see an extension towards the .6857 level next, in line with bullish momentum studies readings. More By This Author:US Dollar Commentary – Monday, Dec. 18FTSE 100 Commentary – Friday, December 15U.S. Dollar Commentary – Friday, Dec. 15