AUD/USD testing bears’ commitment around 0.6800, eyes on Australian GDP

AUD/USD is challenging the bears’ commitment around the 0.68 handle, as it looks to extend the upside to test the five-month highs of 0.6814 reached in early Asia.

The optimistic remarks from the Reserve Bank of Australia (RBA) on the economy helped the spot to stage a comeback from daily lows of 0.6776 to 0.6808 while resurgent US dollar supply also added strength to the aussie’s rebound.

The RBA maintained the key rate at 0.25% while noting that the economic downturn due to the coronavirus pandemic may be less severe than previously expected.

However, sellers continue to lurk above 0.6800, as renewed US-China tensions over phase one trade deal continue to weigh on the market mood. Also, the US riots escalation kept the investors on the edge, capping the upside attempts in the higher-yielding, the AUD.

In the day ahead, the US dollar price action will remain the main driver behind the major’s moves while investors await fresh developments around the US-China issue for fresh trading impetus.

Also, cautiousness will likely persist ahead of Wednesday’s Australian Q1 GDP report, as markets failed to take advantage of the upbeat Q1 Current Account and Companies’ Operating Profits data.

AUD/USD technical levels to watch

The bulls need a break above the 0.6814 level for a fresh move higher towards 0.6850 (psychological level). To the downside, the daily pivot point at 0.6749 could cap the immediate declines. Below which a test of the 5-DMA at 0.6711 will be inevitable.

AUD/USD additional levels