- Commodity rally helps the AUD gather strength on Wednesday.
- US Dollar Index struggles to make a meaningful recovery after mixed data releases.
- Coming up: RBA Bulletin at 1:30 GMT on Thursday.
After spending the majority of the day in a relatively tight range near mid-0.72s, the AUD/USD pair gained traction in the NA session and rose to its highest level since August 30 at 0.7275. As of writing, the pair was trading at 0.7270, adding 0.72% on the day.
The strong performance of commodities led by a sharp rally in oil prices and an improved market sentiment on Wednesday seems to be providing a boost to the commodity-sensitive AUD.
On the other hand, since its run up to the 95 handle last Friday, the US Dollar Index is still having a difficult time determining its next near-term direction. Today’s macroeconomic data releases from the United States showed that housing starts in August increased by 9.2% to 1.282 million to surpass the analysts’ estimate of 1.235 million. However, the potential positive impact of this data was offset by a disappointing 5.7% decline seen in building permits. Meanwhile, a separate report revealed that the current account deficit in the second quarter eased to $101.5 billion from $121.7 billion. As of writing, the DXY was down 0.12% on the day at 94.50.
In the early Asian session on Thursday, the RBA is going to publish its quarterly Bulleting that includes a summary of latest economic and financial developments in Australia.
Technical levels to consider
The pair could face the initial resistance at 0.7285 (50-DMA) ahead of 0.7345 (Aug. 29 high) and 0.7375 (100-DMA). On the downside, supports are located at 0.7215 (daily low), 0.7185 (20-DMA) and 0.7140 (Sep. 17/Sep. 18 low).
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