“¢ The ongoing USD corrective slide helps defend the 0.7050-40 important support.
“¢ The positive move seemed unaffected by weaker copper prices/risk-off mood.
“¢ Investors now eye US consumer inflation figures for a fresh directional impetus.
The AUD/USD pair continued gaining positive traction through the early European session and has now recovered a major part of overnight sharp fall from one-week tops.
A brutal sell-off in the US equity markets prompted some aggressive selling around perceived riskier currency – like the Aussie and was seen as one of the key factors behind the pair’s sharp fall of around 90-pips from an intraday high level of 0.7131.
The selling pressure once again abated and managed to find decent buying interest near the 0.7050-40 strong horizontal support. The US Dollar extended its corrective slide from seven-week tops and was seen as one of the key factors driving the pair higher.
The positive momentum seemed rather unaffected by the prevailing risk-off mood, reinforced by a steep fall in the US Treasury bond yields, and a weaker tone around copper prices, which tend to undermine demand for the commodity-linked Australian Dollar.
It, however, remains to be seen if the pair is able to build on the up-move or continues with its struggle to build on/sustain above the 0.7100 handle amid persistent worries over escalating US-China trade tensions, which has been weighing heavily on the China-proxy Aussie.
Moving ahead, traders now look forward to the US economic docket, highlighting the release of US consumer inflation figures, which might influence Fed rate hike expectations and eventually provide some fresh directional impetus.
Technical levels to watch
On a sustained move beyond the 0.7100 handle, the pair is likely to aim towards testing the 0.7130 supply zone en-route its next major resistance near the 0.7155-60 region. On the flip side, the 0.7050-40 might continue to act as an immediate strong support, which if broken is likely to accelerate the fall further towards the key 0.70 psychological mark.
Share
