The AUD/USD pair built on Tuesday's bounce off multi-day lows near mid-0.7600s and rose to 0.7700 neighborhood, albeit has retreated few pips from session peak.
Currently trading around 0.7680-85 region, the pair caught some fresh bids on Wednesday in wake of in-line with expected wage price data from Australia. In fact, the wage price index rose 0.5% q-o-q in the fourth quarter of 2016 and shrugged off construction work data, which unexpectedly contracted by 0.2% in December quarter but was better-than previous quarter's 4.4% decline. Against the backdrop of a modest US Dollar retracement, from yesterday's multi-week highs, the data lent some additional support to the pair and lifted it to a three day high.
The up-move, however, seems to have lost the momentum amid weaker trading sentiment surrounding copper prices, which tends to dent demand for commodity-linked currencies - like the Aussie. Moreover, continuous rise in the US treasury bond yields also collaborated towards capping any further upside as investors now look forward to the release of minutes from the Fed latest monetary policy meeting, due later during NY session.
The FOMC meeting minutes would be look upon for additional clarity over the Fed’s near-term monetary policy outlook and possibilities of a rate-hike action at the central bank’s upcoming meeting in March, which would eventually determine the pair’s next leg of directional move.
Technical levels to watch
Weakness below 0.7670 level might continue to find support near 0.7650 region below which the pair is likely to aim towards 0.7610 important support before eventually dropping to its next support near 0.7555-50 region. On the upside, sustained momentum above 0.7700 handle could get extended towards 0.7720-30 resistance area ahead of Nov. daily closing highs resistance near 0.7760 region.
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