AUD/USD sticks to softer Aussie data-led weakness, downside seems limited

Haresh Menghani FXStreet

• 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.

USD/JPY stays below 160.50 as markets assess BoJ decision

USD/JPY fluctuates in a relatively narrow range above 160.00 on Tuesday as markets assess the Bank of Japan's (BoJ) decision to raise the policy rate by 25 at the June meeting. Meanwhile, investors keep a close eye on news coming out of the Middle East, while preparing for the critical Fed meeting.

AUD/USD struggles for direction, still below 0.7100

AUD/USD looks to extend Monday’s recovery, although a challenge to the 0.7100 barrier remains elusive ahead of the opening bell in Asia. The Aussie Dollar was unable to take advantage of the RBA's relatively cautious message, which included keeping its OCR unchanged at 4.35% and leaving the possibility of further tightening in the future.

Gold: $4,000 or $4,500? The Fed may decide Gold’s next big move

Gold now surrenders part of its initial advance and recedes to the vicinity of the $4,350 mark per troy ounce on Tuesday. The early enthusiasm sparked by the US-Iran peace deal has faded somewhat, prompting investors to adopt a more prudent stance as they await further details of the agreement and key guidance from the Fed.

XRP pulls back as subdued ETF inflows, layered resistance cap upside

Ripple (XRP) remains elevated above $1.23 at the time of writing on Tuesday, struggling amid a capped upside. Despite an improved overall market sentiment driven by news of a peace agreement between the United States and Iran to end the war in the Middle East, capital inflows remain notably subdued.

1% rate, 160 Yen: Why Japan’s historic hike changed little

The Bank of Japan (BoJ) pushed its short-term policy rate to 1% on Tuesday, the highest setting since 1995 and a 31-year milestone in a normalization cycle barely two years old. It is the kind of number that should mark a turning point for the Yen, and it did almost nothing.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it, focusing instead on slowing economic growth and proving that central bank messaging alone isn’t always enough to drive currencies.