AUD/USD rallies hard in tandem with Gold, eyes on 0.7950
|The AUD/USD pair staged a solid comeback so far this Friday and jumped beyond 0.79 handle, having reversed a temporary slide witnessed a day before.
AUD/USD flirts with 20-DMA at 0.7923
The recovery in AUD/USD gained extra legs, after a risk-off induced rally in the safe-haven gold bolstered the sentiment around the resource-linked AUD, while higher copper and oil prices also added to the Aussie gains. Comex gold jumps +0.70% to $ 1303.09, the highest levels since June 2017.
Further, Spain ‘Terror Attack’ led risk-aversion extended into Europe, curbing the demand for risky assets such as the equities, Treasury yields, which dragged the US dollar broadly lower. Hence, the major also benefited from persisting broad based US dollar weakness.
The Aussie emerges one of the biggest gainers in Europe after its OZ neighbor Kiwi, which rallied 0.58% to 0.7323 levels. Looking ahead, markets look forward to the US consumer sentiment data and Fedspeaks for fresh trading impetus.
AUD/USD Levels to watch
FX Strategists at UOB Group explain, “We indicated yesterday that while extension higher is likely, “a sustained move above 0.7955 is not expected”. AUD briefly touched a high of 0.7962 but the subsequent sharp drop from the top came as a surprise. The decline appears to have scope to extend lower to 0.7855/60 but a clear break below this level is not expected for now (next support is at 0.7830). Resistance is at 0.7905 followed by 0.7935. The high of 0.7962 is not expected to come into the picture.”
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