The AUD/USD pair gained some fresh traction on Wednesday and was seen building on to yesterday's rebound from the 0.7620-15 support area.
The pair on Tuesday witnessed a sharp reversal from 0.7700 neighborhood in wake of better-than-expected US PPI print and hawkish testimony from the Fed Chair Janet Yellen. The major subsequently dropped to test the lower bound of near-term trading range before bouncing off lows and end the day in positive territory.
On Wednesday, the pair extended yesterday’s recovery move and is currently trading around 0.7675-80 band. The up-move, however, lacked momentum amid subdued price-action around commodity space, especially copper, and rising US Treasury bond yields, which tend to dent demand for higher-yielding currencies – like the Aussie.
Market participants on Wednesday will remain focused on the US macro releases that includes – CPI print and monthly retail sales data, which would be looked upon to reinforce hawkish outlook and reaffirm market expectations of faster pace of Fed rate-hike expectations in 2017 and provide fresh impetus for the pair’s next leg of directional move.
Technical levels to watch
Immediate upside resistance remains near 0.7695-0.7700 region above which the pair is likely to extend the upward trajectory towards Nov. 2016 daily closing highs resistance near 0.7745-50 region. On the flip side, weakness below session low support near 0.7655 level, leading to a subsequent drop below 0.7640 level, might continue to find strong support near 0.7610-05 region, which if broken could accelerate the slide towards 0.7555-50 horizontal support, en-route 0.7535-30 region.