Currently, AUD/USD is trading at 0.7375, up 0.11% on the day, having posted a daily high at 0.7381 and low at 0.7334.
AUD/USD has made a minor recovery on the 0.73 handle that lacks any momentum or indeed any conviction. The markets are subdued as we progress through the US session and the broader tone dominates.
Metals continue to dominate the price action and the Aussie found support from a 2% rise in London copper prices earlier and gold has also been better bid on the day so far.
Copper has been range bound for several days previously but short-sellers that have been betting on a steep decline due to low demand seemed to have covered positions earlier in a herd style trade fueling the rally into a consolidation zone.
However, iron ore has been failing to find a base of late and the market cutting the odds of a 2017 rate hike from 35% to 20% on a dovish hold from the RBNZ overnight weighs across the commodity bloc in general.
We will now turn to US retails sales and CPI tomorrow as the next catalyst.
RBNZ: lack of inflation pressure keeps them neutral – UOB
AUD/USD is pressured below the daily moving averages and has the 17-month converging triangle at 0.7294 to the downside in view. Analysts at Commerzbank explained that this is a MAJOR breakdown point for the AUD.
“We would allow it to hold the initial test, we note the 13 count on the daily chart and have opted to exit remaining shorts.
Failure here will trigger losses towards the .7161 December 2016 low.” To the upside, a break of the 200 day smoothed sma at 0.7477 opens risk onto the 0.75 handle and the 200 ema on the daily sticks at 0.7524.