AUD/USD erases early losses, jumps close to session high at 0.7660

After bottoming out at 0.7620 region, the AUD/USD pair rebounded to erase all of its early losses and turn back higher to currently trade around session high level at 0.7660.

A broadly retracing greenback, as measured by the overall US Dollar index, helped the major to shrug-off the initial negative reaction to a drop in NAB business confidence for July and downward revision to June reading. 

The pair also seems to benefit from decelerating Chinese CPI, which now seems to fuel speculation of further easing by Chinese central bank - PBOC.

The pair rebounded from a short-term ascending trend-channel support near 0.7620-15 region and hence, a follow through buying interest would now pave way for continuation of the pair’s near-term appreciating move.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Despite Aussie’s rebound from post RBA low of 0.7480 followed by a break above falling trend line (drawn from Apr 21 high to July 15 high), aggressive buyers are likely to stay on the sidelines, unless there is a clear break above 0.7672 (76.4% of 0.7835-0.7145)."

"Note the area around 0.7672 has repeatedly capped gains in the pair (at least 4 times in the last two months). Thus, a break higher could trigger short unwind and yield rise to 0.7712 – 0.7750 levels."

"On the lower side, failure to take out 0.7672 followed by a dip below Asian session low of 0.7648 could send prices lower to 0.7597."