AUD/USD looks to 0.6500 amid cross-driven strength, ahead of Powell
- AUD bulls aim to regain 0.65 amid broad USD weakness.
- Improved risk tone, cross-driven strength offer support.
- Large option expiries are stacked up at 0.6500, eyes on Powell.
AUD/USD is challenging highs in the upper bound of the 0.6400 level, as the bulls remain poised to take out the 0.6500 barrier amid a turnaround in the risk sentiment.
The spot benefits from fresh selling seen in the US dollar across its main competitors, as the market mood improves in European trading. The US dollar index hit a session low of 99.90 in the last minutes.
Better-than-expected UK growth numbers and likely de-escalation of the Australian-China trade tensions lift the risk sentiment, with S&P 500 futures jumping back into the positive territory above 2,800 levels.
The main catalyst behind the ongoing recovery from daily lows of 0.6451 is the cross-driven strength, as AUD/NZD rallies 1.20% after the kiwi dollar was dumped across the board on dovish Reserve Bank of New Zealand’s (RBNZ) monetary policy decision. The RBNZ kept rates steady and expanded its QE size while leaving doors open for negative interest rates.
Further, the gains in gold and copper prices also add to the recent upbeat momentum seen in the commodity-currency, the aussie. Meanwhile, markets digest the in-line with estimates Australian Wage Price Index data released in Asia.
Attention now shifts towards the speech by the US Federal Reserve (Fed) Chairman J. Powell due later on Wednesday at 1300 GMT. Ahead of the speech, the US PPI data will offer fresh incentives for the aussie traders.
AUD/USD technical levels to watch
At the press time, AUD/USD adds 0.11% to trade at 0.6478, with the upside attempts likely to face stiff resistance 0.6500 (1.0 billion worth option expiries). Buyers would target the 100-DMA at 0.6528 on a break above the latter. To the downside, 20-DMA at 0.6428 will continue challenging the bears. A failure to defend it would bring the 0.6400 support back in play.
AUD/USD additional technical levels