The AUD/USD pair reversed early dip to session low near 0.7515 level but has struggled to regain traction and remained confined within 20-pips narrow trading range.
On Thursday, the pair gained some positive traction on the back of recovery in base metals. The momentum, however, lost steam just ahead of the very important 200-day SMA amid broad based greenback recovery led by the US Treasury Secretary Mnuchin's optimistic remarks on tax reforms. Mnuchin's comments lifted the US treasury bond yields and helped the US Dollar to stage a goodish recovery from three-week lows, eventually capping the pair ahead of the important moving average.
The pair now seems to have entered a consolidation phase amid absent fundament drivers and subdued greenback prices-action. Meanwhile, a positive trading sentiment surrounding commodity space, especially copper, continued lending support to commodity-linked currencies, including the Aussie, and helped the pair to defend the key 0.75 psychological mark, at least for the time being.
Traders now look forward to the US economic docket for short-term trading impetus. Also in focus would be speech by Minneapolis Fed President Neel Kashkari, where comments on monetary policy outlook should also influence the major during early NA session.
Technical levels to watch
Weakness below 0.7515 level (session low) might continue to find support near 0.7500-0.7495 region, below which the pair is likely to aim towards 0.7475-70 horizontal support ahead of mid-0.7400s.
On the upside, any up-move might continue to find resistance at 200-day SMA near mid-0.7500s, which if cleared might trigger a short-covering rally beyond 0.7590 intermediate resistance, and the 0.7600 handle, towards 50-day SMA hurdle near 0.7615 region.
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