AUD/USD breaks higher, tests 0.7890 in Tokyo markets

AUD/USD is catching a leg up in Tokyo trading as risk aversion pushes the US Dollar down, with the pair 0.7889 before receding slightly to the 0.7875 area.

The Aussie has completely shaken off the pullback earlier caused by a contraction in confidence regarding consumer outlook on the Australian economy, with analysts at Westpac explaining the 2.3% decline in the Consumer Confidence survey is mostly due to media coverage of recent tumbles in the Australian stock market and the US S&P 500, rather than a negative outlook on the Australian economy itself. AUD/USD pared back the loss quickly and is now testing higher as a quick sell-off in the Nikkei Index sent the Yen higher, dragging the antipodean currencies with it and sending the US Dollar lower in Asia markets.

Australia will be publishing Unemployment Rate and Employment Change figures on Thursday at 01:30 GMT, and positive figures will help push the Reserve Bank of Australia (RBA) closer to raising interest rates, as middling economic data for the island continent has left the RBA staunchly in wait-and-see mode, likely to stand pat on rates through the remainder of 2018 unless numbers begin to improve for Australia.

AUD/USD Technicals

The Aussie has managed to push back up against the US Dollar in recent days after being driven within spitting distance of the 200-day SMA, currently at 0.7756, but the recent Greenback rally appears to be over, and AUD/USD is now testing into the 34 EMA at 0.7885. Intraday levels have support at 0.7838, with resistance priced in near 0.7908. A break higher from here will leave the pair free to challenge support-turned-resistance at 0.7960.