“¢ A subdued USD demand/retracing US bond yields provide a minor lift.
“¢ Weaker commodity prices do little to provide any additional boost.
The AUD/USD pair broke out of its Asian session consolidation phase and spiked to fresh session tops in the past hour, albeit lacked any strong follow-through.
A modest retracement in the US Treasury bond yields prompted some US Dollar profit-taking and was seen as one of the key factors providing some minor lift to higher-yielding currencies – like the Aussie.
However, a subdued action around commodity space, especially copper, did little to provide any additional boost to the commodity-linked Australian Dollar, with the pair quickly retreating around 15-pips from an intraday high level of 0.7528.
Meanwhile, the market had a rather muted reaction to the Cleveland Fed President Loretta Mester’s comments, saying that the US economic performance is near Fed’s policy goals.
Looking at the broader picture, the pair remains within a broader trading band, held over the past three weeks. Hence, it would be prudent to wait for a decisive break-through the range before determining the pair’s next leg of directional move.
Later during the NA session, a scheduled speech by the Fed Governor Lael Brainard would now be eyed for some short-term impetus on the last trading day of the week.
Technical levels to watch
The key 0.7500 psychological mark might continue to protect the immediate downside, which if broken might accelerate the fall towards 0.7475-70 intermediate support en-route 0.7440 level. On the upside, immediate resistance is pegged near the 0.7540-50 region, above which the pair is likely to aim towards reclaiming the 0.7600 handle.
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