AUD/USD remains near 26-month highs as US data fails to help USD
After starting the day around the 0.78 handle, the AUD/USD pair gathered momentum in the early Asian session and surged to its highest level since May 2015 at 0.7943. In the early NA session, the pair consolidates today's gains and moves sideways near that recent peak. As of writing, the pair is trading at 0.7932, gaining 1.67% on the day.
Although the RBA meeting minutes showed that the bank was concerned about the strengthening AUD, today's price action is being dominated by the weakening USD. Following another failure by the Trump administration to repeal and replace ObamaCare, which is seen as a sign that Trump won't be able to move on with the highly anticipated tax reform and infrastructure spending, investors couldn't find any excuses to hold on to their US Dollars. Today's data from the U.S. couldn't help the greenback retrace its losses either.
- RBA minutes: Things can only get better - ING
According to Tuesday's report released by the U.S. Bureau of Labor Statistics, after a 0.1% decrease in May, U.S. import prices declined 0.2 percent in June while prices for U.S. exports also eased by 0.2%, recording its second consecutive monthly decline. At the moment, the US Dollar Index is at 94.30, its lowest level since August, and is losing 0.65% on the day.
- US: Import prices declined 0.2% in June
Technical outlook
With today's strong rise, short-term indicators for the pair are showing overbought conditions but unless a fundamental development supports the USD recovery, the bullish momentum could persist. 0.80 (psychological level) could be seen as the initial resistance ahead of 0.8075 (Apr. 29, 2015, high) and 0.8160 (May 14, 2015, high). On the downside, supports are located at 0.7785 (daily low), 0.7700 (psychological level) and 0.7575 (100-DMA).
- AUD/USD points to 0.8018 – Commerzbank