AUD/USD sticks to modest recovery gains near 0.7570 area
• Digesting strong mid-European session recovery move.
• USD/US bond yields capping additional gains.
The AUD/USD pair struggled to build on its recovery move from fresh 5-month lows and now seems to have entered a consolidation phase around the 0.7570-80 band.
The market now seems to have digested RBA Governor Phillip Lowe's comments, reiterating that the next move in rates is up rather than down, with some renewed US Dollar buying interest keeping a lid on the pair's recovery.
A modest uptick in the US Treasury bond yields underpinned the greenback and eventually held investors back from buying into higher-yielding currencies - like the Aussie.
Meanwhile, the prevalent positive trading sentiment around commodity space, especially copper, remains supportive for the commodity-linked Australian and might now help limit deeper losses.
Moving ahead, the release of existing home sales data from the US would now be looked upon for some fresh trading opportunities in what could be a rather lacklustre NY trading session.
Valeria Bednarik, American Chief Analyst at FXStreet writes: "the dominant bearish trend remains unaltered with this 40 pips' recovery, and the 4 hours chart shows that the positive momentum is beginning to fade, as technical indicators lost their upward slope after entering positive territory, with the RSI currently flat around its mid-line. In the same chart, the price is a handful of pips above an anyway bearish 20 SMA, also reflecting limited buying interest. The daily high was set at 0.7585, now the immediate resistance, followed by 0.7620."