AUD/USD eyes multi-year highs as risk assets surgeAUD/USDTASTYFX:AUDUSDtastyfxAUD/USD continued its run higher on Tuesday, rising just over 0.5% through mid-day trading to push its weekly advance above 1% as the currency looks set to record a third weekly gain. Now back above 0.7100, AUD/USD is roughly 50 pips away from 3-year highs hit earlier this year. The risk-sensitive currency is benefiting from a broader stroke of risk taking across global financial markets as traders look forward to a resolution of the conflict in the Middle East, which is being reflected by falling energy prices and stabilization in metal prices. Earlier this week, Reserve Bank of Australia Deputy Governor Andrew Hauser expressed concerns about stagflation amid the rise in energy prices caused by the war. Still, AUD/USD is benefiting from the risk-on tone in the market versus the dollar losing its safe-haven appeal. Australia’s economy continues to chug along. Last month, the economy added nearly 50,000 jobs, beating expectations. The next monthly jobs report is scheduled to cross the wires later this week, and traders want to see a recovery in full-time employment, which was lacking in the last jobs report despite broader strength like an increasing participation rate. If the labor market strengthens amid increasing price pressures, that could give the Reserve Bank of Australia more justification to keep hiking rates. The RBA last hiked rates in March to 4.1% on inflation concerns. A shuddering labor market, on the other hand, may weaken the currency if it causes the RBA to hold off with additional rate hikes already priced in. AUD/USD momentum has picked up, with positive slopes on the 9- and 21-day exponential moving averages (EMAs). Tuesday’s move above the 0.71 handle cleared resistance from last week’s trading, opening the door for a potential run toward the March swing high that sits at 0.71878. Meanwhile, the relative strength index (RSI) is gaining ground and nearing entry above 70. Even so, an initial cross above the threshold is usually followed by additional strength before the trade truly becomes overbought.