“¢ The post-RBA selling pressure seems to have abated for the time being.
“¢ The USD bullish momentum takes a brief pause and extends some support.
“¢ Goodish rebound in copper prices provides an additional boost to the Aussie.
The AUD/USD pair remained heavily offered through the mid-European session, albeit now seems to have found some support near the 0.7160 region.
The pair came under some intense selling pressure on Tuesday after the latest RBA monetary policy statement indicated that interest rates are likely to remain at record-low levels for the foreseeable future.
This coupled with a strong US Dollar buying interest exerted some additional downward pressure and further collaborated to the pair’s steep decline of over 75-pips to two-week lows.
With the USD bulls taking some breather, a goodish rebound in copper prices underpinned the commodity-linked Australian Dollar and helped the pair to recover around 20-pips from an intraday low level of 0.7162.
The uptick, however, lacked any strong follow-through amid the prevalent risk-off mood, which tends to benefit the greenback’s safe-haven status and drive flows away from perceived riskier currencies – like the Aussie.
In absence of any major market moving economic releases from the US, the USD price dynamics might continue to act as a key determinant of the pair’s momentum ahead of the Fed Chair Jerome Powell’s scheduled speech later during the US trading session.
Technical levels to watch
Any subsequent recovery might now confront immediate resistance near the 0.7200 handle, above which the pair is likely to head back towards testing the 0.7235-40 supply zone. On the flip side, immediate support is pegged near the 0.7145-40 region, which if broken is likely to accelerate the fall further towards the 0.7100 round figure mark.
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