“¢ A fresh wave of USD selling helps recover early dip and move back above 0.7400 handle.
“¢ Bullish commodity prices provide an additional boost to the commodity-linked Aussie.
“¢ Wednesday’s Australian CPI print eyed for fresh impetus ahead of this week’s US macro data.
The AUD/USD pair caught some fresh bids since the early European session, with bulls now looking to build on the momentum back above the 0.7400 handle.
The US Dollar up-move already seems to have run out of steam on the back of a sharp decline in the US Treasury bond yields and was seen as one of the key factors helping the pair to catch some fresh bids. Adding to this, a positive tone around commodity space, especially copper, provided an additional boost to the commodity-linked Australian Dollar.
Further collaborating to the pair’s goodish rebound of over 50-pips from an intraday low level of 0.7360 was the prevalent risk-on mood, as depicted by strong gains across European equity markets, which was eventually seen driving flows towards perceived riskier-currencies – like the Aussie.
Wednesday’s release of quarterly Aussie CPI print, followed by a duo of US macro data – durable goods orders on Thursday and advance Q2 GDP growth figures, would now play an important role in determining the pair’s near-term trajectory.
Technical Analysis
From a technical perspective, the latest leg of a sudden spike could also be attributed to some fresh technical buying on a sustained move back above 100-period SMA on the 1-hourly chart.
Looking at the broader picture, the pair remains within a familiar range, held over the past six weeks or so and the recent price action clearly seems to suggest that the near-term bearish pressure might still be far from over.
However, it would be prudent to wait for a decisive break-through the trading band before positioning for the next leg of directional move.
Spot rate: 0.7405
Daily High: 0.7412
Daily Low: 0.7360
Trend: Sideways
Resistance
R1: 0.7438 (overnight swing high)
R2: 0.7473 (50-day SMA)
R3: 0.7500 (psychological round figure mark)
Support
S1: 0.7385 (100-period SMA H1)
S2: 0.7360 (current day swing low)
S3: 0.7310 (YTD lows set on July 2)
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