AUD/USD surges to 5-day high, jumps back above 0.7500 handle
|A broad based USD selling pressure assisted the AUD/USD pair to recover swiftly and jumped to a 5-day high level of 0.7537 before retracing few pips to currently trade around 0.7520-25 band.
The greenback witnessed intense selling pressure against its Japanese counterpart and the spillover effect benefitted commodity-linked currencies the most, with the Aussie staging a remarkable recovery back above 100-day SMA to reclaim 0.7500 handle.
Last week, the Australian Dollar got hammered on expectations of further easing by RBA in order to combat deflationary pressure but was contingent on Q2 CPI print.
Ahead of the quarterly CPI release on Wednesday, which would be the key determinant of RBA monetary policy stance on August 11, the pair on Tuesday managed to recover sharply on broadly weaker US Dollar. Moreover, short-term traders would have been inclined to play it safe in case of any surprising rise in inflation.
Meanwhile, this week's key event risk would the oucome of FOMC meeting on Wednesday, where although the central bank is not expected to change its monetary policy stance but would be looked upon in order to get cues over prospects of any further rate-hike during 2016.
Technical levels to watch
From current levels, the momentum seems to boost the pair towards 0.7565 horizontal resistance, above which the pair seems all set to reclaim 0.7600 handle and head towards testing its next major resistance near 0.7630 region.
On the flip side, weakness back below 100-day SMA support near 0.7500-0.7490 region now seems to force the pair to break through recent lows support near 0.7450 level and aim towards testing 50-day SMA support near 0.7410-0.7400 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.