“¢ Upbeat Aussie trade data/Chinese PMI trigger the initial leg of up-move.
“¢ A sharp USD retracement further accelerates the positive momentum.
“¢ Technical buying above 0.7100-0.7120 region fuels impressive rally.
The AUD/USD pair built on its strong intraday upsurge and jumped to near one-month tops, closer to the 0.7200 handle, in the last hour.
A better-than-expected Aussie trade surplus data for September triggered the initial leg of up-move from an intraday low level of 0.7071. Adding to this, Chinese Caixin Manufacturing PMI data managed to hold above the expansion territory and provided an additional boost to the China-proxy Australian Dollar.
The up-move gained additional traction amid the ongoing sharp US Dollar retracement slide from 17-month tops. The USD selling pressure remained unabated after today’s mostly in-line US economic data and did little to hinder the pair’s impressive rally.
Meanwhile, possibilities of some aggressive stops being triggered on a sustained move above the 0.7100-0.7120 region could also be one of the factors fueling the positive momentum, which kept pushing the pair higher through the early North-American session.
Next on tap will be the release of US ISM manufacturing PMI, which will be looked upon for some immediate respite for the USD bulls and might eventually provide some meaningful trading opportunities.
Technical levels to watch
The 0.7200 handle is likely to act as an immediate resistance, above which the up-move could further get extended towards the 0.7225-30 supply zone. On the flip side, the 0.7160-55 region now seems to protect the immediate downside, which if broken might prompt some additional weakness back towards the 0.7110-0.7100 region.
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