• The post-FOMC USD strength keeps exerting downward pressure.
• Softer Chinese PPI print/copper prices further add to the selling bias.
After an initial uptick to 0.7270 area, the AUD/USD pair met with some fresh supply and extended previous session’s rejection slide.
The pair continued with its struggle to build on the positive momentum beyond the 0.7300 handle, with resurgent US Dollar demand prompting some long-unwinding trade on Thursday.
The greenback recovered its post-midterm election slide and was further supported by the Fed’s upbeat assessment of the economy, reaffirming expectations for a December rate hike.
Meanwhile, the Australian Dollar seemed unaffected by the latest RBA monetary policy statement and rather took cues from the disappointing release of Chinese PPI, which slowed further to 3.3% y/y rate in October.
Adding to this, the prevalent negative tone around commodity space, especially copper, further undermined the commodity-linked Australian Dollar and collaborated to the pair’s ongoing retracement slide.
It, however, remains to be seen if the pair is able to attract any fresh buying interest at lower levels or the current pull-back marks the end of recent strong recovery move from over 32-months touched on October 26th.
Moving ahead, the scheduled release of the preliminary Michigan Consumer Sentiment Index for November, a key highlight from today’s relatively thin US economic docket, will now be looked upon for some trading impetus on the last trading day of the week.
Technical levels to watch
Any subsequent fall is likely to find some buying interest near the 0.7225 level, which is followed by the 0.7200 handle and support near the 0.7180-75 region. On the flip side, the 0.7270-75 region now becomes immediate resistance, above which the pair is likely to make a fresh attempt towards conquering the 0.7300 handle.