AUD/USD rebounds to 0.7950 on weaker DXY, higher commodities

The AUD/USD pair reversed almost a quarter of yesterday’s decline and now remains poised to test 0.80 handle once again, as the bulls defend minor bids so far this Tuesday.

AUD/USD: All eyes on Fed’s Yellen

The spot staged a solid rebound in the Asian trades, as the AUD bulls were rescued by a fresh buying-wave caught by the AUD/NZD cross, after the Kiwi extended previous declines on worse-than expected NZ trade surplus and NZIER’s recommendations of little need for an RBNZ rate rise.

Moreover, reports of the Australian Treasury revising lower 2016/2017 cash deficit also added to the renewed upside in the Aussie, while firmer oil, copper and gold prices also lifted the sentiment around the resource-linked AUD.

Furthermore, the major also derived support from dovish comments from Fed Evans and North Korea news led risk-aversion, both of which weighed negatively on the greenback.

However, it remains to be seen if the pair can regain 0.80 handle, as monetary policy divergence is back in play ahead of Fed Chair Yellen’s speech due later today, while forecasts of a fall in iron-ore prices by Goldman Sachs could also keep the recovery gains limited.

AUD/USD Technical View    

Jim Langlands at FX Charts, explains, “while the dailies look heavy, the short term momentum indicators are fairly neutral so another rangebound session may be in store. I prefer to be short but would not chase it lower. Sell into near term strength towards 0.7960/70 with a SL above 0.8000. TP @ 0.7865.”