- AUD/USD trades near 0.7190 on early Wednesday.
- USD weakness and improvement in market risk sentiment help the pair’s rise.
- Break of immediate resistance-line favors its further increase to 0.7220 and then to 0.7300.
The Australian Dollar (AUD) is on bids against the US Dollar (USD) around 0.7190 during early Asian trading on Wednesday. The pair stretched its gains overnight as a persistent weakness of the greenback and positive results from the latest risk events favored the Aussie over the USD. Next up in the line will be second and the final day of the Fed Chair’s testimony.
The USD dropped heavily across the board on Tuesday as the Fed Chair refrained from offering any new signals for the future policy moves during his first-day of semi-annual testimony. Adding to the decline was the plunge in housing starts during January.
In addition to the weaker USD helping antipodeans, overall improvement in market risk sentiment also favored the Aussie. Market optimism brightened recently with the no-deal Brexit going a bit farther after the UK PM Theresa May’s parliament appearance on Tuesday coupled with the absence of any negative comments from the Fed Chair and the Bank of England (BoE) officials while opting for inflation report hearings.
The US-China trade talks have already flashed upbeat signals of a deal during early March when the US President Donald Trump and his Chinese counterpart Xi Jinping meet at Florida. Though, negative impacts of the downbeat developments can’t be denied.
Additionally, the Federal Reserve Chairman Jerome Powell will appear before the House Financial Services Committee during the second and final day of his testimony. The Fed Chair is less likely to offer any new information concerning future policy moves while continue praising economy improvements. However, any signals to the Fed’s future rate hikes will be closely observed.
AUD/USD Technical Analysis
AUD/USD broke immediately descending trend-line connecting highs of January 31 and February 21, which in-turn signal brighter chances of its increase to 0.7220 and 0.7300 resistance levels.
On the downside, 0.7155 can act as nearby support for the pair, a break of which can drag it south towards 0.7110 and an upward sloping trend-line at 0.7075.
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