Having posted a session high level of 0.7627, the AUD/USD pair ran through some fresh offers and has now retreated to the lower end of the daily trading range, around 0.7605 region.
The pair failed to build on early up-move led by today’s upbeat release of Australia’s NAB business survey for the month of June amid the ongoing up-move in the US Treasury bond yields, which was seen extending support to the US Dollar and weighing on higher-yielding currencies – like the Aussie.
The pair’s latest leg of slide over the past couple of hours could also be attributed to some selling bias surrounding commodity space, especially copper, which tends to dent demand for commodity-linked currencies, including the Australian Dollar.
Reemergence of fresh selling pressure, just ahead of the 0.7630-35 strong barrier, clearly seems to suggest that the pair’s near-term corrective slide from over 3-month tops touched in late June could be still far from over. Hence, a follow through weakness back below the 0.7600 handle, and a subsequent drop below two-week lows support near 0.7570 level, now seems a distinct possibility.
Next on tap would be the US economic docket, featuring the release of JOLTS Job Openings and Final Wholesale Inventories ahead of FOMC member Brainard’s speech.
Technical levels to watch
Weakness below the 0.7600 mark could find some support near 0.7585 horizontal level, below which the pair now seems to extend the corrective slide back towards retesting the very important 200-day SMA support near 0.7535-30 region.
On the upside, any up-move might continue to face fresh supply near 0.7630-35 area, above which a bout of short-covering could lift the pair back towards 0.7680 resistance en-route the 0.7700 handle.