The AUD/USD pair is seen reverting to pre-Italian No vote news levels, as the bulls find support from a recovery in commodities’ prices and upbeat China services PMI report.
AUD/USD bounces-off lows near 0.74 handle
Currently, the AUD/USD pair trades modestly flat at 0.7453, having recovered entire losses seen in the Asian trades so far. The AUD staged a solid rebound in tandem with commodities, particularly copper, driving AUD/USD back above 20-DMA barrier located at 0.7441.
Moreover, better-than expected Caixin Chinese services PMI report also lent support to the ongoing recovery in AUD/USD. Adding to this, renewed selling interest seen behind the treasury yields boosted the attractiveness of the emerging market currency AUD, as an alternative higher-yielding asset.
Earlier on the day, the Aussie dived as low as 0.7413 after PM Renzi conceded defeat in Sunday’s election aimed to overhaul Italy’s constitution triggered massive risk-aversion and weighed on higher-yielding currencies such as the AUD.
Markets now look forward to the US ISM services PMI report due later in the NA session ahead of tomorrow’s RBA rate decision.
AUD/USD Levels to watch
The pair finds the immediate resistance at 0.7460 (daily top) above which gains could be extended to the next hurdle located 0.7505 (Nov 17 high) and 0.7575 (Nov 16 high). On the flip side, the immediate support located 0.7400 (round number). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7385 (daily S2) and below that at 0.7366 (Dec 1 low).
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