AUD/USD stages a goodish recovery from 5-month lows
• Recovers 50-pips from, back closer to 0.76 handle.
• Lowe’s speech help offset dovish RBA meeting minutes.
• Weaker US bond yields/USD support short-covering bounce.
The AUD/USD pair staged a goodish recovery and rebounded over 50-pips from fresh 5-month lows touched earlier today.
The pair caught some strong bids after the RBA Governor Phillip Lowe reiterated that the next move in interest rates is more likely to be a hike, though weaker inflation meant interest-rate moves were off the table in the near-term.
Against the backdrop of today's perceived dovish RBA meeting minutes, Lowe's comments provided some immediate respite for the AUD bulls and prompted some short-covering bounce.
Meanwhile, the prevalent positive trading sentiment around commodity space remained supportive for commodity-linked currencies. Moreover, a weaker tone around the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie, coupled with a subdued US Dollar price action also did little to hinder the pair's strong recovery move.
Next in focus would be the release of existing home sales data from the US, which would be looked upon for some short-term trading impetus ahead of the current Fed Chair Janet Yellen's scheduled speech.
Technical levels to watch
A follow-through up-move beyond 0.7585 level now seems to lift the pair beyond the 0.7600 handle towards is next hurdle near the 0.7620 region. On the flip side, 0.7550 area now seems to protect the immediate downside, which if broken would turn the pair vulnerable to extend its downward trajectory towards the key 0.75 psychological mark.