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  • The Aussie is looking for a continued bid as markets wind into Thursday.
  • Metals on the rise, improved China sentiment is responsible for underpinning the AUD, as intrinsic drivers like the RBA remain flat.

The AUD/USD is trading into 0.7260 heading into Wednesday’s overnight session after climbing over the 0.7200 barrier in Tuesday’s trading, bolstered by rebalancing market sentiment as China continues to confidently shrug off trade war volleys from the US.

Early Wednesday at 01:30 GMT sees the Reserve Bank of Australia’s latest Bulletin, but with the Aussie central bank firmly entrenched in a holding pattern little of note is expected to develop from the report; bullish sentiment in the Pacific-Asia session is expected to carry on throughout the week, though the Aussie could see some knock-on volatility arising from the incoming New Zealand GDP reading due shortly, but only if expectations are missed.

The AUD has been in recovery mode for most of the week, grinding its way higher as markets weary of risk aversion begin to push up metals, while the China-Australia factor sees sentiment improving as China continues to remain dedicated to opening up their local markets and improve trade with key countries as they attempt to distance themselves even further from US President Trump’s protectionist policies and trade war rhetoric.

AUD/USD levels to watch

The Aussie is pinning into September highs as broader markets bid up the AUD on recovering metals and commodities, and as FXStreet’s own Valeria Bednarik notes: “as for the technical picture, the pair is currently trading above the 61.8% retracement of its latest daily slump at around 0.7255, now the immediate support. As long as it holds, the pair has room to extend its advance up to the 0.7361, August 28 high. In the 4 hours chart, the pair is now above all of its moving averages, with the 200 SMA covering and reinforcing the mentioned Fibonacci support, and the 20 SMA crossing above the 100 SMA below it. Technical indicators have lost upward momentum but remain within overbought territory, not enough to confirm an interim top.”

Support levels: 0.7255 0.7225 0.7190    

Resistance levels: 0.7300 0.7330 0.7360