“¢ Investors looked past today’s upbeat Aussie retail sales data/Chinese PMI.
“¢ A modest USD rebound prompts some fresh selling at higher levels.
“¢ Focus now shifts to this week’s important releases of the FOMC minutes and NFP.
Having reversed all of its early gains to 1-1/2 week tops, the AUD/USD pair now seems to have entered a consolidation phase and was seen oscillating in a narrow trading range.
Today’s better-than-expected Aussie retail sales data helped offset weaker trade balance data and assisted the pair to build on the post-RBA recovery move from over two-year lows. Adding to this, upbeat Chinese services PMI for June provided an additional boost to the China-proxy Australian Dollar
The data-driven up-move quickly ran out of steam near the 0.7425 region, with a modest pickup in the US Dollar demand prompting some fresh selling ahead of 100-period SMA on the 4-hourly chart.
This coupled with a sharp fall in copper prices exerted some additional downward pressure on the commodity-linked Australian Dollar and further collaborated to the pair’s intraday retracement slide of nearly 50-pips.
The selling bias now seems to have abated a bit, at least for the time being, as traders now seemed to refrain from aggressive bets amid the Independence Day holiday-thinned market liquidity conditions.
It would now be interesting to see if the pair is able to attract any buying interest at lower levels or the current pull-back marks the end of a corrective bounce/resumption of the prior depreciating slide as the focus now shifts to this week’s important US releases – FOMC meeting minutes and the keenly watched NFP.
Technical levels to watch
Any subsequent retracement below the 0.7370-65 area is likely to find support near the 0.7335 region, which if broken might turn the pair vulnerable to head back towards challenging the 0.7300 handle.
On the flip side, the 0.7420-25 region now becomes an immediate strong hurdle, above which the pair seems more likely to aim towards reclaiming the key 0.7500 psychological mark.
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