• Investors look past softer Australian wage price index and track subdued USD demand.
• Retracing US bond yields/positive copper prices remain supportive of the recovery move.
The AUD/USD pair reversed an early dip to 0.7447 level and managed to recover around 40-pips from session lows.
The pair initially weakened to fresh weekly lows on the back of a slight disappointment from the Australian wage price index, coming in to show a rise of 0.5% q-o-q as compared to 0.6% anticipated.
The downtick, however, turned out to be short-lived, with a subdued US Dollar demand and a modest retracement in the US Treasury bond yields extending some support to higher-yielding currencies - like the Aussie.
This coupled with a mildly positive sentiment around commodity space, particularly copper prices, further underpinned the commodity-linked Australian Dollar and remained supportive of the pair's recovery attempt.
It, however, remains to be seen if the up-move is backed by any genuine buying or is solely led by some short-covering, especially after a sharp decline of over 100-pips since the beginning of this week.
Traders now look forward to the US housing market data, which along with a scheduled speech by Atlanta Fed President Raphael Bostic might provide some fresh impetus later during the early NA session.
Technical levels to watch
Any subsequent recovery is likely to confront resistance near the key 0.75 psychological mark, above which the pair might head back towards challenging the 0.7540 supply zone. On the flip side, mid-0.7400s remains the immediate support to defend, which if broken should now pave the way for a resumption of the prior depreciating slide.
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