AUD/USD: takes on the 0.78 handle on positive risk sentiment

AUD/USD has been a top performer in the U.S. session, battling back for a pop at the 0.78 handle and fresh 10-month highs.

Oil has been the big deal on Wall Street today, (read here), that has renewed risk appetite across the aboard and has been very supportive to the commodity linked currencies, such as the Aussie. there is a sense that we are starting to turn a corner after a dismal, China lead, start to 2016.

Last week in fact, China reported not such a terrible Q1 GDP 6.7% annualized GDP growth in the first quarter leading many to believe that China is indeed recovering due to the government measures introduced at the start of 2015 are starting to take effect. The weakest spot had been exports and imports, but even the recent trade surplus this month was a positive surprise.

RBA Stevens has also offered the green-light for the bulls to keep up the act when he explained the monetary stimulus measures still have not taken effect, signalling that the RBA could be on hold for considerably longer this year. Data will be closely scrutinized with critical attention considering the level of the Aussie and today's National Australia Bank's Business Confidence (QoQ) (Q1) will be key.

AUD/USD levels

AUD/USD has touch a high of 0.7828. "The strong rally over the last few
days is clearly overbought but at this stage, it is too early to expect a pronounced pull-back," explained analysts at UOB group. "It is more likely that AUD will consolidate its strong gains and trade sideways at these higher levels. Expected range, 0.7770/0.7835." Meanwhile, we have the pivot now based at a lofty 0.7796 with Classic R1 at 0.7845, R2 at 0.7878 and R3 at 0.7927. To the downside, it has been a steep climb from the vicinity of the 20 dma at 0.7673, with S1 at 0.7763, S2 at 0.7714 and S3 at 0.7681.