AUD/USD recovers above 0.76 as USD loses strength

Following a drop to 0.7590, the AUD/USD recovered back above 0.76 as the US Dollar Index backpedaled towards 100.40 from 100.50. As of writing, the pair is still down 0.22% at 0.7613.

Earlier today, the retail sales from Australia came in weaker than expected, dragging the AUD/USD lower during the first half of the day. The data showed a 0.1% contraction in February vs. a 0.4% expansion in January and a 0.3% expectations of a gain. Matthew Hassan, Research Analyst at Westpac, argued that this drop in the retail sales reflect the spending restraint associated with income pressures and increased caution in the country.

• Australia: Feb retail sales dips 0.1% as discretionary spend falls - Westpac

Markets' attention will be on the US economic docket, headlining ISM Manufacturing PMI and Construction spending figures. Later during the session, FOMC members, New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Richmond Fed President Jeffrey Lacker will take the stage, possibly giving statements about the monetary policy outlook. Lately, the FOMC members have been staying on the dovish side, defending the idea of the economy not overheating. In case we see a hawkish tone during today's statements, the US Dollar Index could pick up some momentum.

The immediate resistance for the pair is located at 0.7640 (20-DMA/50-DMA), below which the pair could extend the rise towards 0.7680 (Mar. 30 high) and 0.7750 (Mar. 21 high). On the downside, below the daily low at 0.7590, 0.7530 (100-DMA) and 0.7490 (Mar. 9 low) could be targeted.

• AUD/USD risks a test of 0.7580 – UOB