AUD/USD recovery loses steam near 20-DMA

The AUD/USD pair ran through fresh over the last hour, taking on its recovery back above 0.74 handle as improving risk conditions offer some respite to the AUD bulls.

AUD/USD trims losses as stocks recover

Currently, the AUD/USD pair trades -0.80% lower at 0.7404, climbing back above 0.74 handle. The Aussie found good support near 0.7385 region and crawled higher, as the rebound in the Asian equities gain momentum and further fuelled risk-on trades, with markets seeking to take the yield advantage in the AUD. The Japanese benchmark Nikkei 22 index jumps +2%, while Australia’s ASX 200 bounces +0.80%, back above 5,150 levels.

Earlier on the day, the major dropped briefly below 0.74 barrier after the Chinese central bank devalued Yuan suddenly, triggering a fresh round of risk-aversion across the financial markets. More so, poor Chinese industrial profits data also added to the downward pressure on the AUD/USD pair.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7425/30 (20-DMA/ daily pivot) above which gains could be extended to the next hurdle located at 0.7484 (5-DMA). On the flip side, the immediate support located at 0.7387 (daily low). Selling pressure is likely to intensify below the last, dragging the Aussie 0.7357 (50-DMA).