- AUD/USD lost its traction after rising above 0.7760.
- US Dollar Index recovered above 90.00 during American session.
- Focus shifts to mid-tier data releases from Australia.
After spending the first half of the day in a tight range around 0.7750, the AUD/USD pair edged higher and reached a daily top of 0.7763. With the greenback gathering strength during the American trading hours, however, the pair reversed its direction and was last seen losing 0.15% on the day at 0.7728.
In the absence of high-tier macroeconomic data releases, falling US Treasury bond yields made it difficult for the USD to find demand earlier in the day. Reflecting the currency’s broad-based weakness, the US Dollar Index dropped to a daily low of 89.83.
Nevertheless, the cautious market mood and the sharp drop witnessed in the GBP/USD pair amid renewed Brexit concerns allowed the greenback to start outperforming its rivals. Currently, the US Dollar Index is little changed on the day at 90.09.
Later in the session, the 10-year US Treasury note auction in the US will be watched closely by market participants.
On Thursday, HIA New Home Sales and June Consumer Inflation Expectations data will be featured in the Australian economic docket.
AUD/USD near-term outlook
Mizuho Bank analysts expect AUD/USD to fluctuate in a relatively tight range in June.
“In June, AUD/USD will be supported by improved Australian fundamentals and the RBNZ’s monetary policy outlook,” analysts said. “However, it will be swayed by temporary iron ore price movements and rising US long-term interest rates. As such, it will probably move around a range from the upper-$0.76 mark to the lower-0.78 level. The pair’s movements will also reflect market expectations in the run-up to RBA’s board meeting in July.”
AUD/USD to hover around a range from the upper 0.76s to the lower 0.78s – Mizuho.
Technical levels to watch for
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