AUD/USD sticks to modest daily gains, around 0.7235 level
Our preference: long positions above 0.7215 with targets at 0.7250 & 0.7265 in extension.Alternative scenario: below 0.7215 look for further downside with 0.7200 & 0.7185 as targets.
• The USD remains supported by Clarida’s overnight hawkish comments.
• Bullish copper prices underpinned Aussie and helped limit any downside.
• Revised US GDP print/Powell’s speech now eyed for some fresh impetus.
The AUD/USD pair struggled to build on the early uptick, albeit has managed to hold with modest daily gains, around the 0.7235 region.
After a brief consolidation phase, the US Dollar caught some fresh bids since the early European session and was seen as one of the key factors behind the pair’s sudden fall of around 20-pips in the last hour.
The greenback held near two-week highs and remained supported by the Fed Vice Chair Richard Clarida’s overnight hawkish comments, reaffirming the need for further rate increases.
Adding to this, resurfacing US-China trade tensions further collaborated towards keeping a lid on any meaningfulup-move for the China-proxy Australian Dollar.
However, the prevalent positive tone around copper prices, though did little to provide any bullish impetus to the commodity-linked Aussie, helped limit deeper losses, at least for the time being.
Next on tap will be the preliminary release (second estimate) of the US Q3 GDP growth figures, which followed by the Fed Chair Jerome Powell’s scheduled speech will be looked upon for some short-term momentum play ahead of the quarterly release of Aussie private Capex data on Thursday.
Technical levels to watch
Any subsequent fall might continue to find some support near the 0.7200 handle, below which the pair is likely to accelerate the slide further towards the 0.7165 region. On the flip side, the 0.7260-65 region now seems to have emerged as an immediate hurdle, which if cleared might assist the pair to aim towards reclaiming the 0.7300 round figure mark.