AUD/USD plugs in a new May high as bulls gorge on risk recovery
FXStreet News

AUD/USD plugs in a new May high as bulls gorge on risk recovery

  • Aussie joins the broader market in a recovery rally as trade tensions ebb and risk appetite swings back.
  • The early week is continuing quietly for the Aussie, nothing on the docket for Tuesday.

The AUD/USD is trading on the high side, testing near 0.7585 in the early overnight session.

Monday saw the Aussie bounce against the Greenback as broader FX markets saw a healthy resurgence of risk appetite. Commodities crept higher and took commodity-based currencies with them, such as the AUD, which is now up around 2.3% from May’s low of 0.7412 against the US Dollar.

This week sees a significant reduction in risk aversion, with traders coming out of their shells as trade tensions between the US and China begin to subside, at least for now. Both countries have agreed to put any further tariff action “on hold” while trade negotiations continue, and markets are recovering after months of fear surrounding a possible trade war between the world’s two largest economies.

Tuesday is a thin showing for the AUD on the economic calendar, and the action will have to wait until Wednesday, when the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, delivers a speech at 08:00 GMT.

AUD/USD levels to watch

FXStreet’s Valeria Bednarik, on the Aussie’s technical stance, which has turned moderately bullish for the short-term: “the pair is currently trading a couple of pips above the 38.2% retracement of its latest weekly slump, and presents a bullish short-term stance in the 4 hours chart, as the price is also well above its 20 and 100 SMA, while technical indicators entered positive territory, now losing partially its upward momentum, but far from changing course. The current level is key and if it is clearly broken, the recovery can extend up to 0.7660, the 61.8% retracement of the mentioned decline.”

Support levels: 0.7520 0.7470 0.7435  

Resistance levels: 0.7590 0.7625 0.7660

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.