AUD/USD: Risk-off weighs
Despite renewed North Korea missile launch threat, the sentiment around the Aussie remains lifted amid China’s reflation story and stronger Australian labour market report. Moreover, the spot also derives support from the RBA Bias Index, which points to 50bp of rate hikes in the first half of 2018, while suggesting that the RBA statements have become progressively hawkish over this year.
However, further upside in the spot remains at the mercy of the upcoming US retail sales and industrial production releases, especially after yesterday’s solid US CPI data, which bolstered Fed’s rate hike expectations. As a result, the US dollar remains broadly bid in sync with Treasury yields, keeping any upside attempts in AUD/USD pair short-lived.
AUD/USD Levels to watch
According to OctaFX team, the AUD/USD demonstrates a confident descending impulse after some consolidation near the 0.8000 level. The RSI on the 15-minute chart approached the oversold zone, that together with the price coming close to the angled support line, may result in an upward rebound soon with potential growth to 0.8000. The next target within the local descending trend will be at 0.7870."
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