AUD/USD: bears in control despite the commodity-comeback, plus more positive risk sentiment

Currently, AUD/USD is trading at 0.7539, down -0.07% on the day, having posted a daily high at 0.7548 and low at 0.7539.

• Wall Street recovers Wednesday's heavy losses

AUD/USD has been better offered towards the double bottom at 0.7532 when supply ensued in the correction from 0.7567. The Aussie has been out of favor with markets despite a slight recovery in commodity prices, notably with Australia's largest export in iron ore continuing to recovery from the immense supply from March's business. 

• AUD/USD intermarket: what is iron ore's relationship with the Aussie currently?

WTI was making fresh highs n the US closing hours and meeting the 4th April highs. Gold too is consolidated at the recent highs while the DXY only managed a slight bid, up 0.1% on the day with US 10yr treasury yields that ranged sideways between 2.33% and 2.37% - bonds were better bid. All in all, the Aussie is showing its true worth n this environment as the market remains cautious over the high beta currency and the RBA's reluctance to hike interest rates in the near future, stuck between a rock and a hard housing market with subdued inflationary risks elsewhere.  We now await the nonfarm payrolls event and the outcome of Trump's summit with Xi and his Chinses counterpart. 

AUD/USD levels

• AUDUSD: Would find support at 0.7525

Analysts at Westpac explained that the downward momentum persists, and AUD’s next target 0.7500 (9 March low).

Valeria Bednarik, chief analyst at FXStreet explained that the pair is poised to extend its decline according to intraday technical readings: "In the 4 hours chart, a strongly bearish 20 SMA capped the upside on an early attempt to advance, whilst technical indicators remain in negative territory, with the RSI veering south around 35, in line with further declines. Below 0.7530, the pair can extend its decline down to 0.7490, March low, whilst below this last the negative momentum is expected to accelerate, with 0.7450 being the next bearish target."

AUD/USD 1-3 month: 

Analysts at Westpac explained that the Aussie is at risk of testing 0.7800 during the next few weeks as USD longs are pared. "Longer term we expect to see it slightly lower to around 0.7600. A steady hand from the Fed in June plus an optimistic RBA should limit downside on AUD/USD during the next few months. Further out, though, the underlying AUD trend should be gently lower, as growing bulk commodity supply gradually cools the 2016 price surge. Iron ore should be back under $80/tonne by June, with further (modest) declines likely in H2 2017. (21 March)."