AUD/USD benefits from Asia risk-on and light trading, 0.7950 tested

AUD/USD is seen moving further away from one-week lows struck at 0.7888, and now looks to regain 0.7950 barrier amid a risk-friendly market environment.

AUD/USD hovers around 5-DMA at 0.7943

The Aussie stalled its recent losing streak and turned positive on Monday, as the bulls were offered respite by a corrective slide seen in the US dollar against its major peers. Meanwhile, positive tone seen around the Asian equities also lent support to the recovery in AUD/USD from below 0.79 handle.

The spot extended its retreat from two-year tops last week, weighed down by less hawkish RBA policy outcome and mixed Aus macro releases. Further, upbeat economic assessment was overshadowed by jawboning, as reflected in the RBA’s Statement of Monetary Policy (SoMP), which also collaborated to the Aussie weakness.

Additionally, markets are resorting to profit-taking on their AUD shorts ahead of the key Chinese macro updates lined up for release later this week. In the meantime, focus remains on the US LMCI and Fedspeaks due later today for near-term trading opportunities.  

AUD/USD Levels to watch   

Jim Langlands at FXCharts explains, “While the short term indicators are reasonably neutral, the dailies are warning the longs, and if we get below 0.7890/00 we could then see a move to 0.7875, which should be strong support if/when we get there, but below which opens 0.7850, 0.7835 and 0.7820. On the topside, 0.7950 will see sellers ahead of Friday’s high of 0.7980, and 0.8000. I don’t think we go close to this today, but if wrong, above 0.8000 could then see a return to last Tuesday’s high of 0.8041 and then to the trend high of 0.8065.”