AUD/USD – losing height after failing at 61.8% Fibo

AUD/USD is trimming Friday’s gains after the bullish move ran out of steam around 0.7571 (61.8% of 0.7835-0.7145) levels despite resilience in iron ore and falling political uncertainty in Australia.

Nears July 4 high

The pair dropped to July 4 high of 0.7545 before recovering slightly to trade around 0.7552 levels. Aussie jumped to 0.7571 levels on Friday despite strong US non-farm payrolls release. Moreover, a weaker wage growth number took a wind out of the treasury yields, which ensured the American dollar lost steam.

Meanwhile, over the weekend, the political uncertainty dropped in Australia after PM Turnbull declared victory. Iron ore prices remain steady as well in Asia above $55/tonne, despite growing bearish calls. Still, the pair trimmed Friday’s gains in Asia. Given the thin data docket, the pair is at the mercy of the broader market sentiment and oil price.

AUD/USD Technical Levels

The immediate hurdle is noted at 0.7571 (61.8% of 0.7835-0.7145), above which prices could test supply around 0.76. A violation there would expose 0.7647 (June 24 high). On the other hand, a breakdown of support at 0.7545 (July 4 high) would open doors for 0.75 handle, under which the pair could target 0.7450 (38.2% of 0.6827-0.7835).