AUD/USD sticks to softer Aussie data-led weakness, downside seems limited
• Softer Aussie trade balance data prompts some selling on Thursday.
• Weaker USD/positive copper prices helped limit further downside.
Having failed to clear 100-day SMA barrier, the AUD/USD pair lost some ground and eroded a part of previous session's strong up-move to six-week tops.
With investors looking past yesterday's upbeat Aussie GDP growth figures, a weaker-than-expected Australian trade surplus data weighed on the domestic currency.
The miss from trade balance figures followed a modest decline in the AIG Construction Index, coming in at 54.0 for May as compared to 55.4 recorded in April, and exerted some downward pressure during the Asian session on Thursday.
Further downside, however, remained cushioned amid the ongoing retracement slide in the US Dollar, which remained on the back-foot amid lingering concerns over a full-blown trade war between the US and its key allies.
This coupled with a positive trading sentiment around copper prices, which tends to underpin demand for the commodity-linked Australian Dollar, might further contribute towards limiting any deeper corrective slide, at least for the time being.
It would now be interesting to see if the pair is able to find any fresh buying interest at higher levels or traders opt to lighten their bullish bets, especially after the recent upsurge of over 150-pips since last Friday and from a technically significant moving average resistance.
Technical levels to watch
Any subsequent retracement below 0.7640 level is likely to find support near the 0.7610-0.7600 region, below which the slide could further get extended towards 0.7565 horizontal support.
On the flip side, a convincing breakthrough 100-DMA barrier, near the 0.7670 region, is likely to lift the pair back towards the 0.7700 handle en-route its next major hurdle near the 0.7735-40 area.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
