“¢ Surging copper prices underpin commodity-linked Aussie at the start of a new week.
“¢ Persistent USD selling provides an additional boost and remains supportive.
“¢ Technically remains poised to continue with the ongoing bullish momentum.
The AUD/USD pair continued scaling higher through the early European session on Monday and rose to over three-week tops in the last hour.
A sharp upsurge in copper prices, which tends to underpin demand for the commodity-linked Australian Dollar, helped the pair to catch strong bids at the start of a new trading week and build on last week’s goodish rebound from over two-year lows.
This coupled with persistent selling bias surrounding the US Dollar provided an additional boost and further collaborated to the pair’s upsurge to its highest level since mid-June. Despite Friday’s upbeat headline NFP print, s0fter wage growth data kept exerting downward pressure on the greenback and remained supportive of the strong bid tone.
Today’s upsurge could also be attributed to some follow-through technical buying, especially after Friday’s late bullish breakthrough a descending trend-channel resistance on the 4-hourly chart. Hence, an extension of the ongoing positive momentum, amid empty US economic docket, now looks a distinct possibility.
Technical levels to watch
Immediate resistance is pegged near the 0.7495-0.7500 region (50-day SMA), above which the pair is likely to head towards challenging the 0.7545-50 supply zone. On the flip side, mid-0.7400s now seems to protect the immediate downside, which if broken might prompt additional weakness towards the 0.7400 handle.
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