AUD/USD retreats from yearly tops, still well bid above 0.77 handle

The AUD/USD pair trimmed some of its early to yearly tops near mid-0.7700s and retreated over 20-pips to currently trade around 0.7730-25 band. 

A mild recovery in the US treasury bond yields helped the key US Dollar Index to bounce off a bit from over five-week lows and seems to be a key factor weighing on higher-yielding currencies - like the Aussie. Adding to this, weaker trading sentiment around commodity space, especially copper, has failed to extend any additional bullish impetus and collaborated towards capping the resource-linked currencies, including the Australian Dollar.

Ahead of the US President Donald Trump's speech and RBA meeting minutes, scheduled during early Asian session on Tuesday, traders might also be inclined to take some profits off the table and could also be one of the reasons for the pair's retracement from the highest level since Nov. 9.

Later during NY trading session, Chicago Fed President Charles Evans is due to speak about current economic conditions and monetary policy, and might also provide some fresh impetus. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, “failure to take out the weekly 50-MA earlier this month, followed by a blast higher last week not only kept the RSI above 50.00, but also suggests the retreat from the late Feb high of 0.7741 was corrective move. This, coupled with the highest weekly close (above 0.77) since April 2016 has opened doors for 0.7814 (upper end of the Bollinger band). On the downside only a daily close below 0.76 would signal bullish invalidation.”

1 Week
Avg Forecast 0.7722
100.0%70.0%50.0%045505560657075808590951001050
  • 50% Bullish
  • 20% Bearish
  • 30% Sideways
Bias Bullish
1 Month
Avg Forecast 0.7588
100.0%85.0%20.0%020304050607080901000
  • 20% Bullish
  • 65% Bearish
  • 15% Sideways
Bias Bearish
1 Quarter
Avg Forecast 0.7503
100.0%80.0%10.0%01020304050607080901000
  • 10% Bullish
  • 70% Bearish
  • 20% Sideways
Bias Bearish