AUD/USD moved away from daily highs during the American session amid a recovery of the US dollar in the market. The pair found resistance at 0.7965 and pulled back toward 0.7900.
AUD/USD holds above 0.7900
During the American session the Aussie bottomed at 0.7911 and at the moment, it trades at 0.7920/25, marginally higher from Friday’s closing price. Price is consolidating near the 0.8000 handle, still close to 2-year highs.
The greenback gained momentum on the back a slide in US bonds. US yields turned higher in New York. The 10-year yield rose from 3-week lows at 2.22% to 2.25%.
Today data in the US, showed mix numbers. The preliminary June PMI came in above expectation at 54.2 while existing home sales contracted 1.8% to 5.52 million units (vs 5.58 million expected).
Wednesday will be the key day for the pair and for US bonds. In Australia, CPI data will be released while in the US, the Federal Reserve will end its 2-day meeting with their decision on monetary policy and the release of the statement. No change in rates is expected.
Technical outlook
“From a technical point of view, the 4 hours chart presents a neutral-to-bearish stance, as the price kept moving back and forth around a horizontal 20 SMA, while technical indicators turned south, but remain stuck around their mid-lines”, said Valeria Bednarik, Chief Analyst at FXStreet.
According to her, the downside potential is being limited by dollar's self-weakness but she warns that a downward acceleration through 0.7875 should result in additional declines, at least in the short-term.
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