• USD selling remains unabated on Wednesday.
• Upbeat Chinese data provides an additional boost.
• US retail sales/PPI eyed for trading impetus.
The AUD/USD pair gained some fresh traction on Wednesday and inched back closer to 3-week tops, touched in the previous session.
The pair stalled its overnight rejection slide from the 0.7900 handle and caught some fresh bids on the back of upbeat Chinese economic data, which tends to underpin demand for the China-proxy Australian Dollar.
Also collaborating to the pair’s up-move on Wednesday was persistent US Dollar selling bias. The latest US consumer inflation figures dampened prospects for any aggressive Fed rate hike moves in 2018, further reinforced by sliding US Treasury bond yields, and prompted some fresh USD weakness.
This coupled with the US President Donald Trump’s decision to fire Rex Tillerson as the US Secretary of State, and plans to impose tariffs on China, continued exerting some downward pressure on the greenback and remained supportive of the pair’s up-move.
It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move once again fizzles out near the 0.7900 handle as traders now look forward to the US economic data – monthly retail sales and the latest PPI figures, for some fresh impetus.
Technical levels to watch
Immediate resistance remains near the 0.7900 handle, above which the pair is likely to aim towards testing the 0.7945-50 supply zone before eventually darting to reclaiming the key 0.80 psychological mark.
On the flip side, mid-0.7800s now seems to have emerged as an immediate support, which if broken might prompt some additional weakness towards 100-day SMA support near the 0.7820 region en-route the 0.7800 round figure mark.
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