AUD/USD remains near session lows despite weak greenback
Despite a daily close above the 100-DMA on Monday, the AUD/USD pair failed to build on its gains and stayed under pressure on Tuesday, erasing previous day's earnings. As of writing, the pair is trading at 0.7530, losing 0.13%, or 12 pips, on the day.
Following the PPI data from the United States, the US Dollar Index failed to make a meaningful recovery and remains near the 97 handle, losing 0.15% on the day. However, in the early NA session, the U.S. Treasury Bond yields remain in the green, limiting the losses of the USD.
- US: Producer Price Index for final demand was unchanged in May
On the other hand, the dismal performance of commodities on Tuesday doesn't allow the pair to rebound as the commodity-linked AUD struggles to find demand. In the early trading hours of the Asian session, the Westpac Consumer Confidence will be released from Australia ahead of the Retail Sales and Industrial Production figures from China. Analysts at Commonwealth Bank of Australia (CBA) think that favourable Chinese May economic activity (industrial production, retail sales, and fixed asset investment) could underpin the AUD/USD pair.
Technical outlook
0.7520, where the 200-DMA meets the Fib. 38.2% retracement of December 2016 - March 2017 uptrend, seems to have formed a strong support for the pair in the short-term. With a clean break below this level, the pair could aim for 0.7465 (50-DMA) and 0.7400 (psychological level). On the upside, resistances align at 0.7540 (100-DMA), 0.7565 (Jun. 7 high) and 0.7600 (psychological level).
- AUD/USD strong hurdle lines up around 0.7555/75 – UOB