The AUD/USD pair is flashing green and struggling to hit above the 0.6500 level while taking bids near the 0.6485 level and representing 0.20% gains on the day mainly due to the fresh selling in the U.S. dollar.
The improving risk sentiment in the market also providing support to the Australian dollar an keeps the currency pair bullish. The AUD/USD is trading at 0.6483 and consolidates in the range between the 0.6451 – 0.6492. However, the traders are keenly awaiting the Federal Reserve Chairman Jerome Powell’s speech on economic issues.
The greenback looking flat and struggles to gain any meaningful traction by the expectations that the Fed might be required to drive interest rates below zero. However, the expectations for negative Fed rates further bolstered after the U.S. President Donald Trump on Tuesday urged the U.S. central bank to do more policy easing. While the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.90 at 2:50 AM ET (0650 GMT).
The reason for the risk-on market sentiment could be attributed to the Better-than-expected UK growth numbers. The fresh ease in the Australian-China trade tensions also keeps the market light, with S&P 500 futures turn positive above 2,800 levels. Moreover, the latest gains in the gold prices and copper prices also contributed to the commodity-currency, the Aussie bullish omentum. Meanwhile, markets digest the in-line with estimates Australian Wage Price Index data released in Asia.
Fig 1 – AUDUSD 4H Chart
Technically, the AUD/USD is trading with a bullish bias, having surged above 0.6480 area, which has opened further room for buying until 0.6525 and 0.6560 level. Recently, the pair has formed bullish engulfing above the 50-period EMA which is suggestings odds of bullish trend continuation. However, the sideways trend and thin volatility in the market is keeping pressure on the AUD/USD pair. We should consider taking buying trades over 0.6465 area today, elsewhere, selling can be seen below 0.6465 to target 0.6415. Good luck!