Brocker.Org: AUD/USD holding gains to 3-week highs, around 0.75 mark


The AUD/USD pair maintained its strong bid tone for the third consecutive session and jumped to near three-week highs, beyond the key 0.75 psychological mark.

The prevalent politically uncertain environment in the US continues to weigh on the greenback, with the key US Dollar Index falling to its lowest level since the US Presidential elections and helping the pair to build on to its recent recovery move from 4-month lows touched during the early half of May month. 

Adding to this, fading expectations of faster Fed rate-tightening cycle, against the backdrop of recent dismal US macro data, has been driving the US treasury bond yields lower across all maturities and is further seen benefitting higher-yielding currencies – like the Aussie.

Meanwhile, a mildly negative sentiment surrounding commodity space, especially copper, which tends to derive demand for commodity-linked currencies, including the Australian Dollar, seems to be the only factor keeping a lid on the pair’s up-move, at least for the time being. 

Later during the NA session, the US economic docket that includes – flash manufacturing PMI, new home sales and Richmond manufacturing index, would now be looked upon for some fresh trading impetus. 

Technical levels to watch

On a sustained move above 0.7500-0.7510 area, the pair is likely to aim towards testing 50-day SMA hurdle near 0.7530-35 zone en-route 100-day SMA resistance near 0.7555 region. On the downside, 0.7470-65 area now becomes immediate support to defend, which if broken could accelerate the slide towards 0.7430 horizontal support before the pair eventually drops below the 0.7400 handle and head towards retesting 0.7385 strong support.