AUD/USD climbs to 0.7520-25 area, back closer to weekly tops set on Wednesday
28.10.2021, 07:15

AUD/USD climbs to 0.7520-25 area, back closer to weekly tops set on Wednesday

  • Rising bets for an early RBA rate hike helped AUD/USD to attract some dip-buying on Thursday.
  • Rebounding US bond yields acted as a tailwind for the USD and could cap gains for the major.
  • Investors now await ECB policy decision and the Advance US GDP report for a fresh impetus.

The AUD/USD pair managed to recover over 40 pips from daily lows and climbed to fresh daily tops, around the 0.7520-25 region in the last hour.

The pair attracted some dip-buying on Thursday and reversed an intraday fall to three-day lows, around the 0.7480-75 region amid rising bets for a rate hike move by the Reserve Bank of Australia (RBA). The speculations were fueled by Wednesday's release of RBA trimmed mean inflation for the third quarter, which indicated that consumer cost pressures are getting entrenched.

This, along with a subdued US dollar price action, helped offset a softer risk tone and acted as a tailwind for the perceived riskier aussie. The AUD/USD pair has now moved back closer to weekly tops touched on Wednesday, though any meaningful positive move seems elusive. A goodish rebound in the US Treasury bond yields should help limit the USD losses and cap gains for the major.

Investors might also refrain from placing aggressive bets, rather prefer to wait on the sidelines ahead of Thursday’s key event/data risks. The European Central Bank will announce its monetary policy decision during the mid-European session. Apart from this, the Advance US Q3 GDP report should infuse volatility in the markets and provide a fresh impetus to the AUD/USD pair.

Hence, any subsequent move up runs the risk of fizzling out rather quickly, warranting some caution before positioning for a further intraday appreciating move. Nevertheless, the pair, for now, has turned positive for the fourth successive day and the emergence of fresh buying at lower levels supports prospects for a move towards monthly swing highs, around the 0.7545 area.

Technical levels to watch

 

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