AUD/USD: the commodity bloc is feeling further pain, watch 0.7320 downside

Currently, AUD/USD is trading at 0.7354, down -0.16% on the day, having posted a daily high at 0.7367 and low at 0.7334.

AUD/USD remains better offered, despite minor attempts to recover from the recent lows down in the 0.7320's. The greenback is performing nicely having recently recovered the 99 handle in the DXY while US yields are on the verge of a breakout to the upside, with US 10yr yields rising +1.5bp to 1.412% overnight. The bullishness came despite the concerns over the abrupt sacking of Comey, FBI's chief, by president Trump and after some caution, we were back to basics. 

That meant for Aussie, weaker metals and a drag lower eventually as markets remain fixated on the Fed likely to raise rates next month again while the RBA is still stuck between a hard place and a rock. The dovishness from the RBNZ will have also been a weight on the commodity bloc and we are also seeing a bid in USD/CAD at the time of writing. 

RBNZ: the bottom line, RBNZ is clear - ANZ

AUD/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the risk remains towards the downside. "In the 4 hours chart, a brief recovery above its 20 SMA was quickly reverted, whilst technical indicators held within bearish territory, now resuming their declines. A recovery above 0.7420 is required to see some further relief recoveries in the Aussie, although a break below 0.7330, will likely result in a test of 0.7250."