AUD/USD extends strong bullish momentum further beyond 0.79 handle

Haresh Menghani FXStreet

The Australian Dollar continued to rise against its American counterpart, with the AUD/USD pair surging through the 0.7900 handle for the first time since May 2015.

After yesterday's brief pause, the pair regained traction on Tuesday and continued with its recent sharp appreciating move despite the release of minutes from the RBA's July 4 policy meeting again raised concerns over rising A$. The central bank repeated its view that a rising domestic currency would complicate economic rebalancing, albeit portrayed an upbeat economic outlook and saw a decent improvement in the world economy.

• RBA Minutes: A new hawkish message? - TDS

Adding to this, a broad based US Dollar sell-off, led by the latest news report that two Republicans senators announced their rejection of the US President Donald Trump's health care bill further collaborated to the pair's sharp upsurge to 26-month highs, around 0.7920-25 region.

• McConnell: Senate to try for a repeal bill with 2 year implementation delay

Meanwhile, possibilities of some big stops getting triggered could also be one of the factors behind the pair's continuous upsurge of nearly 350-pips from sub-0.7600 level touched last Monday. With short-term technical indicators pointing to highly overbought conditions, it would be prudent to wait for a consolidative move or a near-term correction before initiating any fresh bullish positions.

In absence of any major market moving economic releases from the US, the pair remains at the mercy of USD price dynamics and broader market risk sentiment.

Technical levels to watch

A strong follow through buying interest beyond 0.7930 area has the potential to continue lifting the pair beyond 0.7955 intermediate resistance towards reclaiming the key 0.80 psychological mark. On the flip side, any pull-back from higher levels now seems to find immediate support near the 0.7900 handle, below which the corrective slide could get extended towards 0.7830 horizontal support.

Author

Haresh Menghani

FXStreet

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

EUR/USD breaks below 1.1800, two-week lows

EUR/USD’s selling pressure is gathering pace now, breaching below the key 1.1800 yardstick to hit new two-week troughs on Wednesday. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and ahead of the publication of the FOMC Minutes.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.