“¢ A follow-through USD retracement remains supportive of the ongoing recovery.
“¢ Improving risk-appetite offsets resurgent US bond yields and remains supportive.
The AUD/USD pair extended overnight rebound from fresh YTD lows and is now looking to build on the momentum back above the 0.7400 handle.
Despite a goodish pickup in the US Treasury bond yields, the US Dollar corrected farther from 11-month peaks set yesterday and was seen as one of the key factors driving the pair higher for the second consecutive session.
This coupled with a slight improvement in investors’ risk appetite, as depicted by buoyant trading sentiment around global equity markets, was further seen boosting demand for perceived riskier currencies – like the Aussie.
Meanwhile, a consolidative price-action around copper prices failed to provide any additional lift to the commodity-linked Australian Dollar but did little to hinder the pair’s ongoing positive momentum.
With a relatively thin US economic docket, featuring the release of flash Markit manufacturing and services PMI, the USD price dynamics might continue to act as an exclusive driver of the price-action on the last trading day of the week.
Technical levels to watch
A follow-through buying interest has the potential to continue lifting the pair further towards its next major hurdle near the 0.7445-50 supply zone, above which a fresh bout of short-covering is likely to assist the pair further towards reclaiming the key 0.7500 psychological mark.
On the flip side, the 0.7375-65 region now seems to act as an immediate strong support, which if broken might turn the pair vulnerable to break below multi-month lows support near the 0.7350-45 region and head towards testing the 0.7300 handle.
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