AUD/USD: Bulls rescued by a rally in AUD/NZD & equities

The bears take a breather from the ongoing downward spiral, prompting a tepid-bounce in AUD/USD from fresh four-month lows struck at 0.7329 earlier on the day.

AUD/USD manages to hold 0.7320 support

Amid a better risk environment persisting in Asia, fuelled by higher oil prices and firmer Asian indices, the higher-yielding Aussie found some respite after the overnight declines.

Moreover, a retreat in the US yields across the horizon combined with a bounce in copper prices underpins the sentiment around the spot. Weaker treasury yields make the Emerging market currencies more attractive investment option.

The AUD/USD pair also finds support from cross-driven strength, as the AUD/NZD cross rallies +1.20% on a dovish RBNZ, which knocked-off the Kiwi to 0.6820 levels. The RBNZ kept policy steady, although sounded less optimistic on the economy, with the RBNZ Governor Wheeler not expecting inflation to move rapidly.

All eyes now remain on the US data sets, with the US jobless claims and PPI data due to be reported ahead of Fedspeaks.

AUD/USD Levels to watch   

At 0.7348, the immediate support is located at 0.7300 (zero figure). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7284 (early Jan lows) and below that 0.7250 (psychological levels). On the flip side, the pair finds the immediate resistance at 0.7399 (May 9 high) above which gains could be extended to the next hurdle located 0.7418 (10-DMA) and 0.7466 (20-DMA).