AUD/USD inter-markets: Sell the rallies to 0.7700 ahead of Fed?

The Aussie has entered into a bullish consolidative phase over the last few weeks, as an upturn in copper and iron-ore prices remain supportive of the elevated levels in the major.

However, every upside attempt has met fresh offers just ahead of 0.77 handle in response resurgent broad based US dollar demand. The US dollar index remains within a striking distance of six-week highs reached last week at 101.75, largely on the back of increased expectations of a March Fed rate hike and Trump’s tax cut talks.

As for today, the AUD/USD pair manages to cling onto recovery gains, despite extension of the rebound seen in the greenback versus its main competitors yesterday. Moreover, the Aussie’s recovery also remains unperturbed by unimpressive release of the Australian construction work done and wage price index data.

The negative impact of poor Aus macro news was outweighed by steep losses in the EUR/AUD cross, as the euro remains undermined amid geopolitical risks in the Eurozone. To conclude, the AUD/USD pair will continue to find support from the recent bullish momentum seen in copper and iron-ore prices. However, in the near-term, it remains to be seen how long the Aussie manages to stand resilient to the broad USD strength, as investors shift their attention to the upcoming FOMC minutes of February meeting.

In terms of technicals, the pair finds the immediate resistance at 0.7710 (daily high) above which gains could be extended to the next hurdle located 0.7732 (multi-week high) and 0.7750 (psychological levels). On the flip side, the immediate support located at 0.7659 (20-DMA). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7600 (round figure) and below that 0.7537 (200-DMA)

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