AUD/USD: Bears guarding 0.72 barrier amid risk-on

The overnight recovery in the AUD/USD pair from multi-week troughs lost legs just shy of 0.72 handle and the major retreated thereon, despite extension of risk-on trades into Asia.

AUD/USD eyes on 0.72 handle

Currently, the AUD/USD pair trades almost unchanged at 0.7181, with the bulls struggling hard to take-out 0.72 barrier. The Aussie staged a solid comeback from RBA Governor Steven’s comments induced sell-off, before meeting fresh supply in early Asia just below 0.7200 levels and now consolidates below the last.

The bulls try to take advantage of the persisting risk-on market profile as the Asian equities rebounding higher alongside oil prices, which favour the higher-yielding currency AUD. However, downbeat Aus construction output data adds to further RBA rate cut expectations and therefore, keeps the recovery in check. Australia Construction Work done for Q1 dropped -2.6% versus -1.5% expectations and -3.6% last.

Nothing of note for the major in the day ahead, and hence, markets will take cues from a slew of second-liner US economic releases for further momentum. While main focus remains on the Aus private capex numbers due tomorrow.

AUD/USD Levels to watch

The pair finds the immediate resistance at 0.7200 (round figure) above which gains could be extended to the next hurdle located at 0.7239/61 (10 &200-DMA). On the flip side, the immediate support located at 0.7105 (April 29 & Mar 1 Low). Selling pressure is likely to intensify below the last, dragging the Aussie 0.7065 (Feb 14 Low).