AUD/USD hits 2-1/2 week tops, just above mid-0.7200s
| • Investors looked past the escalating US-China trade tensions.
• Fresh USD selling drives higher for the third straight session.
• Bullish commodities remain supportive of the momentum.
The AUD/USD pair built on its overnight strong up-move and touched 2-1/2 week tops, just above mid-0.7200s in the last hour.
A combination of supporting factors kept pushing the pair higher for the third consecutive session on Wednesday. The market reaction to the latest escalation of the US-China trade spat turned out to be short-lived and was seen lending support to the China-proxy Australian Dollar.
Meanwhile, the US Dollar struggled to preserve overnight recovery gains led by surging US Treasury bond yields, which coupled with a positive tone across commodity space, especially copper, providing an additional boost to commodity-linked currencies - like the Aussie.
Today's strong up-move could further be attributed to some fresh technical buying following yesterday's bullish break through the 0.7200 handle. Hence, a follow-through up-move, possibly towards 50-day SMA, now looks a distinct possibility.
Later during the early North-American session, the US housing market data - building permits and housing starts, will now be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Immediate resistance is pegged near the 0.7270-75 region, above which the pair seems all set to aim towards reclaiming the 0.7300 handle (50-DMA). On the flip side, the 0.7225-20 region now seems to protect the immediate downside and is closely followed by the 0.7200 handle, which if broken might prompt some fresh weakness back towards 0.7150-40 strong horizontal support.
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