AUD/USD rises to test weekly highs as Russiagate escalates

• US Dollar tumbles as Michael Flynn pleads guilty. 
• Safe-haven assets soar. 
• AUD/USD breaks range and tests 0.7640.

The AUD/USD pair broke to the upside a two-day range amid a sharp decline of the US dollar. The greenback tumbled amid escalating political tension in the US. 

Trump's former national security adviser, Michael Flynn, pleaded guilty to lying to the FBI about talking to Russia's ambassador. The media reported that Flynn would testify against Trump. The events related to the 2016 Presidential campaign triggered a slide of the greenback across the board. 

Investors rushed for safe haven assets and sold-off the US dollar. The yen and the Swiss franc outperformed while gold jumped more than 1%. The Dow Jones retreated more than 350 points from daily highs before trimming losses. The US Dollar Index dropped from above 93.00 to 92.50 in a few minutes, hitting the lowest since Monday. It was hovering around 92.70, at the same level it had a week ago. 

Technical outlook 

AUD/USD broke a two-day range and rose above 0.7600. It continued to rise and tested the 0.7640/45 area that is the key short-term resistance. That level capped the upside last week and also on Monday.  A consolidation on top would signal a continuation of the recovery. The next strong barrier is seen below 0.7700. 

On the downside, 0.7595 (the upper limit of the previous range) is now the immediate support; followed by 0.7545/50 (weekly lows) and 0.7530 (Nov low).