AUD/USD holds above 0.71 despite USD strength

  • Consumer confidence improves in February in Australia.
  • U.S.-China trade optimism boost antipodeans.
  • US Dollar Index recovers to 97 area on Wednesday.

Despite the broad-based USD strength on Wednesday, the AUD/USD pair is clinging to its daily gains and looks to close the day modestly higher above the 0.71 mark. As of writing, the pair was up 0.22% on the day at 0.7110.

Earlier in the day, the Westpac announced that the Consumer Confidence rose 4.3% in February in Australia following January's 4.7% decline and provided the initial boost to the AUD. Moreover, the decisive upsurge seen in the NZD/USD pair following the RBNZ's policy statement, which adopted an optimistic tone regarding the near-term economic outlook, helped the positively-correlated AUD/USD push higher in the day.

Although the greenback started to gather strength in the second half of the day and forced the pair to pull away from its weekly high of 0.7135, the AUD limited its losses as the latest headlines on the U.S.-China trade conflict supported antipodean currencies. In an interview with Fox News, White House Press Secretary Sarah Sanders said that President Trump was weighing the possibilities regarding the March 1 deadline and reiterated that they saw progress in the latest talks. 

Later in the session, the monthly budget statement from the U.S. will be looked upon for fresh impetus. In the early trading hours of the Asian session on Thursday, the Melbourne Institute will publish the Consumer Inflation Expectations.

Technical levels to consider

The pair could face the initial resistance at 0.7130/35 (50-DMA/daily high) ahead of 0.7160 (20-DMA) and 0.7240 (Feb. 6 high). On the downside, supports are located at 0.7090 (daily low), 0.7050 (Feb. 12 low) and 0.7000 (psychological level).

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