AUD/USD mildly positive, but remains capped below 0.7600 handle

Haresh Menghani FXStreet

The AUD/USD pair traded with mild positive bias for the second straight session but remained capped below the 0.7600 handle.

The pair seems to have hit a strong barrier near the 0.7600 region after today's Chinese trade balance data showed a surprise deficit for February. The drop in trade balance data was primarily led by a sharp spurt in imports, rising 44.7% y-o-y and lower-than-expected rise in exports. Despite of the disappointing headline number, jump in imports seems to lend some support to the China-proxy Australian Dollar.

The pair, however, remained below previous session's multi-day swing high near 0.7630 region, touched in the aftermath of neutral monetary policy stance by the RBA.

Meanwhile, growing prospects for an eventual March Fed rate-hike action continues to underpin the US Dollar, with the pair struggling to register any meaningful recovery from Friday's four week lows. Weaker sentiment around the commodity space, which dents demand for commodity-linked currencies - like the Aussie, could be one of the factors hindering the pair's recovery move.

Today's US economic docket features the release of ADP report on private sector employment, which is seen as precursor to the official data (NFP), due on Friday, and hence, would be looked upon for some fresh trading impetus during early NA session.

Technical levels to watch

Sustained momentum above 0.7600 handle might continue to confront resistance near 0.7630 level, above which the recovery move is likely to accelerate towards 0.7675-80 resistance area ahead of 0.7700 round figure mark.

On the downside, 0.7570 level is likely to protect immediate downside, which if broken now seems to drag the pair below 50-day SMA support near 0.7550 level towards testing the very important 200-day SMA support near 0.7530 region.

1. R3 0.7683
2. R2 0.7659
3. R1 0.7624
PP 0.7600
1. S1 0.7566
2. S2 0.7542
3. S3 0.7507

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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