“¢ Broad-based USD weakness helps reverse an early dip to 0.7362.
“¢ Trade-tensions/falling copper prices keep a lid on any strong up-move.
“¢ ADP report/ISM PMI might provide some impetus ahead of FOMC minutes.
The AUD/USD pair managed to recover around 20-pips from session low, albeit struggled to make it back above the 0.7400 handle.
A follow-through USD weakness, with the key US Dollar Index dipping to over one-week lows, around the 94.00 handle, was seen as one of the key factors behind the pair’s modest rebound from an intraday low level of 0.7362.
However, escalating US-China trade-war fears, coupled with the ongoing slump in copper prices did little to provide any additional boost to the China-proxy/commodity-linked Australian Dollar and kept a lid on any meaningful up-move.
Meanwhile, investors seem to have fully digested the recent positive factors, which supported this week’s goodish recovery move from over two-year lows, and the price-action over the past 24-hours suggests that the near-term corrective bounce might have already run out of steam.
Hence, resumption of the prior weakening trend, possibly led by hawkish FOMC meeting minutes, due for release later today, now seems a distinct possibility. Ahead of the key event risk, the ADP report on the US private sector employment and ISM non-manufacturing PMI might also help traders grab some short-term opportunities.
Technical levels to watch
Immediate resistance is pegged near the 0.7400 handle and is followed by overnight swing high level of 0.7425, above which the pair is likely to aim towards reclaiming the key 0.7500 psychological mark.
Alternatively, weakness back below the 0.7360-55 immediate support might now turn the pair vulnerable to head back towards challenging the 0.7300 important support.
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