AUD/USD: Bulls eye 0.7750 as Trump tariffs exempt Australia
- Bulls unperturbed by risk-off, as USD selling and Trump tariff exemption support.
- Better US durable goods data could offer some respite to the US dollar.
The rebound in AUD/USD got a fresh boost after the headlines hit the wires that Trump issued tariff exemptions for EU, Australia, Korea and Brazil among other countries. The rates went on to print fresh daily tops of 0.7723, having found solid near 0.7690 region earlier today.
The Aussie’s recovery from downbeat Australian employment data induced sell-off was mainly driven by broad-based US dollar sell-off, which outweighed the persisting risk-off trades, fuelled by mounting US-China trade war fears. China retaliated to counter up to $ 60 billion of the US tariffs on the Chinese imports, escalating the trade war angst.
Meanwhile, tumbling US Treasury yields combined with the Asian equities meltdown boost the demand for the AUD as an alternative higher-yielding currency. However, it remains to be seen if the commodity-currency can sustain the bounce, as the ongoing weakness in copper prices could keep a lid on the prices.
Later today, the pair will continue to track the USD price-action and broader market sentiment ahead of the Fedspeak and US durable goods orders data, which could offer some relief to the USD bulls.
AUD/USD levels to watch
Jim Langlands at FX Charts, notes: “If correct, support today will arrive at 0.7685 and then at 0.7670. Below that would allow a move towards 0.7645, below which would allow a move to the 100 WMA (0.7625) and to major rising trend support 0.7570, although that may take a while. On the topside, resistance will be seen today at 0.7710 and at 0.7725. Above there could stretch back to 0.7750 and to 0.7785 although this seems doubtful. Selling rallies is preferred.”