- The AUD / USD reached its highest level since January 16, 0.6922 becomes the last peak in almost five months.
- The tone of risk is gaining ground after the President seems to have stepped back from the earlier threat of fighting the riots.
- For now, the Aussie has posted optimistic numbers, housing numbers, the RBA Bullock and first-quarter GDP.
AUD / USD climbs to 0.6915, an intraday high of 0.6923, amid the recently elevated risk mood in the Asian session on Wednesday. In doing so, the Australian pair probes the highest since January 16, 2020, amidst positive news for risk from the United States as well as optimistic data from the Australian PMI.
The Australian AiG construction performance index for May fell from 21.6 to 24.9 as the Commonwealth Banking PMI rose above the 25.5 expected to 26.9. In addition, the Commonwealth Bank PMI composite index also crossed 26.4 previously with a score of 28.1.
Beyond the data, news from Axios that U.S. President Donald Trump is stepping back from the earlier threat of using military power to tame the riots seems to have boosted the market’s sense of risk.
As a result, yields on 10-year US Treasuries gain 1.5 basis points (bps) at 0.698% while the Japanese NIKKEI gains more than 2.0% at 22,795 in the middle of the opening minutes of Tokyo Wednesday.
It should also be noted that the cautious optimism of the American health official concerning the vaccine against the coronavirus (COVID-19) as well as the hopes of economic recovery and the weakness of the American dollar also delight the Australian bulls.
That said, traders are preparing for Australian GDP in the first quarter (Q1) for publication at 01:30 GMT. While forecasts suggest a 0.3% drop in QoQ GDP figures compared to the previous expansion of 0.5%, any unfavorable reading may encourage bears to enter high levels over several days.
A steady rise above 0.6900 allows the pair to target the January 16 peak near 0.6935 before targeting 0.7000 round number. On the contrary, the overbought RSI signals a decline to the low of early January near 0.6850, including a break can recall the peaks of February near 0.6775.