Currently, AUD/USD is trading at 0.7534, down -0.05% on the day, having posted a daily high at 0.7539 and low at 0.7533.
AUD/USD has been on the back foot, and the double top is a psychological barrier for the bulls at the moment. The Aussie was pressured o/n by metal prices despite a soft dollar ahead of the showdown on today’s FOMC outcome. The US 10 year yields were struggling to stay above water and there has been a shift to risk off assets such as the yen and gold.
“Metals were mixed, with the minor metals pushing higher, while concerns over Chinese demand limiting other metals. Zinc fell sharply after falls in steel futures in China drive fears of weaker demand in steel in China. Copper held steady after data showed inventories on the LME fell 1.3% to 275kt, whileSHFE copper inventories also fell,” explained analysts at ANZ.
However, the Aussie remains supported on such a theme above 0.7520 and awaits domestic data later in the week in the employment picture for the economy. We will have some initial data today in Westpac’s consumer confidence that could spark some activity in the currency, but unlikely to shift the sticks around too much considering the events ahead. The Chinese data will also be of interest – we have Chinese Retail Sales, Industrial Production, and money data for May.
“Should Chinese figures disappoint, the pair will be at risk of losing the 0.7500 level, while beyond the multi-week high posted last Wednesday at 0.7566, the recovery can extend beyond 0.7600, ” argued Valeria Bednarik, chief analyst at FXStreet.
Valeria Bednarik, chief analyst at FXStreet also highlighted the 4 hours chart, with the price hovering around a horizontal 20 SMA. “Technical indicators head nowhere around their mid-lines. Overall, the risk is towards the upside, and beyond the initial reaction to data, the pair will need to clearly establish below 0.7450 to lose its bullish stance.”