AUD/USD clings to small gains above 0.7050 despite USD strength
- Commodity rally lifts AUD on Wednesday.
- US Dollar Index advances above 97.
- 10-year US T-bond yield up 1.8%.
Despite a broad-based USD strength on Wednesday, the AUD/USD pair advanced to a daily high of 0.7070 and was last seen trading at 0.7055, where it was up 0.25% on a daily basis.
Led by a more-than-9% gain witnessed in crude oil prices, commodity-sensitive currencies such as the AUD gathered strength today. Furthermore, the improved market sentiment as reflected by a decisive rally seen in Wall Street provided an additional boost to the currency.
However, the pair's gains got limited as the greenback returned from the Christmas holiday on a strong note. Fueled by the 10-year Treasury bond yield's 1.8% upsurge in the session, the US Dollar Index, which tracks the greenback's value against a basket of six major currencies, recovered above the 97 mark. At the moment, the DXY is up 0.55% on the day at 97.11.
The only data release from Australia in the remainder of the week will be the private sector credit change, which is scheduled to be published on Friday. Tomorrow, weekly jobless claims, consumer confidence, and new home sales will be featured from the U.S.
Technical levels to consider
The pair could face the first support at 0.7030 (Dec. 21 low) ahead of the critical 0.7000 (psychological level). On the upside, resistances align at 0.7070 (daily high), 0.7120 (Dec. 21 high) and 0.7180 (100-DMA).
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