AUD/USD hesitates at 0.7560, US dollar rhetoric fades

Currently, AUD/USD is trading at 0.7546, up +0.92% on the day, having posted a daily high at 0.7563 and low at 0.7465.

The Australian dollar found renewed interest as market sentiment shifts due to PM May's conciliatory speech. It's evident that risk appetite increased and it is back on track as the pair gained 65-pips in the trading day. Later, AUD docket expects two news event: Westpac Consumer Confidence Index and Consumer Confidence readings. Although both have a moderate impact, the US dollar lacks catalysts, and any positive results can build further momentum to favor long-Aussie positions.  

RBA Ian Harper: recession risk downplayed

The Australian Business Review reports on the recession risk in Australia, "The Reserve Bank of Australia has indicated its growing concern around record levels of household debt, signaling a reluctance to lower interest rates further to avoid stoking the market. Sydney housing is already among the most expensive in the world.

"While the economy shrank 0.5 percent in the third quarter, the first contraction since early 2011, Mr. Harper downplayed the risk of recession, forecasting a rebound in economic activity."

AUD/USD Levels to consider

In terms of technical levels, on the daily chart, upside barriers aligned up to 0.7580 (previous support zone), 0.7680 resistance (previous resistance in Sept/Oct) and above that around 0.7770 (Nov. 2016 high). While supports are aligned at 0.7444 (value zone since Nov. 2016), 0.7317 (Nov. 2016 critical support) and below that around 0.7169 (Dec. 2016 low).

On the long-term view, although limited, the trading tone remains bullish and adding on pullbacks as long as prices do not break below 0.7469 near the 50 SMA. Furthermore, it is relevant to point that the Aussie trades against a critical resistance; 0.7542 (short-term 61.8% Fib). If prices close and open above such significant handle, then 0.7770 should be the immediate upside level to target and challenge.

AUD/USD analysis: Aussie remains strong, despite risk sentiment