AUD/USD consolidating in a range just below 2-month highs

Haresh Menghani FXStreet

The AUD/USD pair traded within a 15-pips narrow trading range on Monday and was seen consolidating recent gains to two-month highs.

The pair ticked higher on upbeat comments on the Australian economy by RBA Governor Philip Lowe, who reportedly said that the economy was capable of a faster growth. Despite of the up-tick, the pair remained below 0.7635 level, two-month highs touched last week, in wake of Lowe's warning about the headwinds - weaker wage growth, rising home prices and high household debt.

• RBA's Lowe: Growth next couple years likely stronger than recently

Nevertheless, the pair held with minor gains above the 0.7600 handle amid subdued action around the US Treasury bond yields, which failed to underpin the US Dollar demand and was seen lending some support to the higher-yielding currencies - like the Aussie.

With an empty economic docket at the start of a new trading week, the pair remains at the mercy of US bond yield dynamics ahead of a scheduled speech by the Chicago Fed President Charles Evans.

Technical levels to watch

Bulls would be eyeing for a strong follow through momentum beyond 0.7635 level, above which the pair seems all set to head towards testing 0.7670 horizontal resistance before aiming to reclaim the 0.7700 handle.

On the flip side, the 0.7600 handle is likely to protect immediate downside, which if broken is likely to accelerate the slide towards 0.7575-70 horizontal support en-route mid-0.7500s and the very important 200-day SMA support near 0.7530 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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