AUD/USD consolidates near 5-week tops ahead of US data
|- DXY weakness underpins.
- Capped by negative Asian equities, iron-ore & copper prices.
- Focus on US data.
The AUD/USD pair remains better bid so far this session, although eased slightly from five-week highs of 0.7680 levels, as the bulls await fresh impetus for the next push higher.
AUD/USD: DXY drops on US tax bill worries
The Aussie extends yesterday’s side trend, as the bulls gather pace for a sustained move above 0.77 handle amid fresh selling seen in the US dollar versus its main peers, as the renewed concerns over the US tax bill negated upbeat US retail sales report induced optimism around the buck.
The US dollar stalled its post-FOMC rebound and now remains on the defensive after two US Republican senators on Thursday were reported to have sought changes to the proposed legislation to overhaul the US tax code.
Moreover, stronger Australian jobs and consumer confidence data also continue to boost the sentiment around the Aussie.
Consumer confidence surprised to the upside - Westpac
"The Westpac Melbourne Institute Index of Consumer Sentiment rose 3.6% to 103.3 in December from 99.7 in November."
However, it remains to be seen if the major can regain 0.77 handle, as risk-off would somewhat weigh amid negative sentiment seen on the Asian indices, while weaker iron-ore and copper prices are also likely to keep the gains limited in the resource-sensitive AUD.
As the dust settles over the central banking events aftermath, markets look forward to the US industrial production, capacity utilization and Empire State manufacturing index for further momentum.
AUD/USD Preferred Strategy
According to Jim Langlands at FX Charts, “The short-term indicators are now mixed and a choppy session at close to current levels would not surprise although the dailies look constructive for further gains, but now that US rates are at parity with Australian rates I do not really think that the Aud$ has too much upside from here and I would be looking for levels to sell into strength. Patience may be required.”
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