AUD/USD jumps back above 0.7400 handle, fresh session tops

   “¢   USD loses some ground after mostly in-line GDP growth figures.  
   “¢   Trump’s optimistic comments do little to revive USD demand.
   “¢   Technical buying above 100-hour SMA provides an additional boost.

The AUD/USD pair quickly reversed a mid-European session dip to fresh session lows and is now looking to extend the momentum further beyond the 0.7400 handle.  

After yesterday’s sharp retracement slide from two-week tops, the pair caught some fresh bid on the last trading day of the week and the latest leg of a goodish pickup over the past couple of hours could be attributed to a modest US Dollar retracement.  

The greenback failed to build on overnight recovery move/preserve early gains and started losing some ground following the release of advance US GDP growth figures. The report showed that the US economy expanded at its fastest pace in nearly four years but failed to impress market participants, anticipating higher growth rate.  

Meanwhile, the market reaction to the US President Donald Trump’s optimistic comments over the US economy turned out to be largely muted, with some technical buying above 100-hour SMA might now assist the pair to build on its intraday climb.  

Following today’s Q2 GDP growth data, Trump delivered his remarks and said that that next quarter’s numbers will be ‘outstanding’ and that we are on track to hit highest annual average growth rate in more than 30 years but did little to revive the USD demand.

At current levels, the pair remains on track to end nearly unchanged for the week, reinforcing a six-week-old trading range. Hence, it would be prudent to wait for a convincing breakthrough the broader trading range before committing to the pair’s next leg of directional move.  

Technical levels to watch

A follow-through up-move beyond 0.7420 level is likely to lift the pair back towards 0.7455-60 supply zone, above which a fresh bout of short-covering could assist the pair to reclaim the key 0.7500 psychological mark.

On the flip side, the 0.7390-85 zone now seems to protect the immediate downside, which if broken is likely to accelerate the fall towards 0.7340-35 intermediate support en-route YTD lows, around the 0.7310 region.