AUD/USD spikes back closer to 26-month highs, around mid-0.7900s

The AUD/USD pair caught some fresh bids near the 0.7900 handle on Wednesday and inched back closer to 26-month highs touched in the previous session.

On Tuesday, the pair rallied hard to the highest level since May 2015 and was being supported by perceived hawkish RBA meeting minutes and broad based US Dollar weakness. A modest pull-back from higher levels was bought into near the 0.7900 handle, clearly suggesting that bulls remain in full control.

Traders seem to have largely ignored a modest uptick in the US Treasury bond yields, which tend to underpin the greenback demand and weigh on higher-yielding currencies - like the Aussie. Even today's downbeat MI leading index data and a mildly softer tone around commodity space failed to dent the prevalent highly bullish sentiment surrounding the major, with bulls now eyeing a break through mid-0.7900s hurdle.

Later during the NA session, the US housing market data would now be looked upon for some short-term trading impetus ahead of the key Australian jobs data, due for release during early Asian session on Thursday. 

   •  US housing data in focus today – Danske Bank

Technical levels to watch

A strong follow through buying interest beyond the mentioned barrier has the potential to continue boosting the pair even beyond the key 0.80 psychological mark towards its next resistance near 0.8035 level. 

On the flip side, the 0.7900 handle now seems to have emerged as immediate support, which if broken might trigger a corrective slide towards 0.7830 strong horizontal support.