AUD/USD hits yearly highs as NY services contract, Alibaba AI boost sentiment

AUD/USD has surged to yearly highs around 0.6780, gaining momentum from multiple market catalysts including weak US services data and positive risk sentiment from Asian markets. The Federal Reserve Bank of New York reported ongoing contraction in the regional services sector, weighing on dollar strength and supporting the Australian currency's advance. Additionally, Alibaba's rally on AI developments has boosted overall market risk appetite, traditionally benefiting the commodity-linked Aussie dollar. The pair has broken above the previous yearly resistance at 0.6750, with technical indicators suggesting continued bullish momentum. Immediate resistance lies at 0.6800, while support has formed at the breakout level of 0.6750. The combination of dollar weakness from soft US economic data and improved risk sentiment from technology sector gains positions AUD/USD for potential further advances, though traders should monitor upcoming Australian employment data for confirmation of domestic economic strength.