AUD/USD trades near daily highs around 0.7380 as USD remains under modest pressure

• US Dollar Index extends losses below 95.
• Copper futures add more than 1% on Friday.
• There won’t be any macroeconomic data releases from the U.S.

The AUD/USD pair closed the previous day below the 0.74 mark and extended its losses as the Chinese Yuan extended its losses to a fresh 2018 lows amid escalating concerns over the China-U.S. trade conflict. However, following the initial drop to a fresh 17-day low at 0.7317, the pair reversed its course and erased all of its daily losses to turn positive above mid-0.73s. At the moment, the pair is trading at 0.7375, adding 0.27% on the day.

A sharp recovery witnessed in the CNY and a robust rally seen in copper prices helped the commodity-sensitive aussie. After recording losses for four straight  days since Monday, copper futures are now up nearly 1.5% at 2.735.

On the other hand, a notable USD weakness provided some extra fuel to the pair’s daily surge as well. The US Dollar Index, which came under a sharp selling pressure in the late NA session after US President Trump voiced his displeasure about the Fed’s rate hikes, struggled to make a decisive recovery above the 95 mark amid a lack of fundamental catalysts that could wake the USD bulls up. As of writing, the index was down 0.25% on the day at 94.73.

There won’t be any macroeconomic data releases from the U.S. and the DXY is likely to continue to impact the pair’s price action.

Technical levels to consider

 The initial resistance for the pair aligns at 0.7400 (20-DMA) ahead of 0.7465 (50-DMA) and 0.7500 (psychological level). On the downside, supports align at 0.7360 (Jul. 19 closing level), 0.7315/10 (Jul. 20/Jul.2 low) and 0.7285 (Jan. 6, 2017, low).