“¢ Trump-led USD selling pressure seems to have abated for now.
“¢ Weaker commodities weigh on Aussie and prompt some profit-taking.
“¢ Repositioning trade ahead of today’s key event risk adds to the pressure.
The AUD/USD pair traded with a mild negative bias on Wednesday and has now eroded a major part of previous session’s up-move to near two-week tops.
The recent recovery move from the 0.7200 neighborhood, or 20-month lows, stalled ahead of the 50-day SMA hurdle and the pair is now threatening to snap four consecutive days of winning streak, despite today’s upbeat Aussie Q2 construction sector data.
The US Dollar sell-off, triggered by the US President Donald Trump’s critical comments on the Fed’s policy tightening, now seems to have receded and was seen as one of the key factors prompting some profit-taking, especially after an upsurge of around 180-pips over the past one-week or so.
Adding to this, a slight deterioration in investors’ risk-appetite, as depicted by negative trading sentiment around equity markets and reinforced by sliding US Treasury bond yields, further undermined demand for perceived riskier currencies – like the Aussie and collaborated to the pair’s modest pull-back from near two-week tops.
Meanwhile, a weaker tone around commodity space, especially copper, did little to lend any support to the commodity-linked Australian Dollar, with some repositioning trade ahead of today’s key event risk – the release of FOMC meeting minutes, exerting some additional downward pressure on the major.
Technical levels to watch
Any subsequent slide is likely to find support near the 0.7330 level, below which the pair is likely to slide back towards retesting the 0.7300 round figure mark. On the flip side, 0.7360-65 area now seems to act as an immediate resistance and is closely followed by 50-day SMA hurdle, currently near the 0.7385 region.
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