AUD/USD strongest in Asia 2017, ignores weak China PMIs

The Australian dollar remains on the front foot versus its American counterpart, with the AUD/USD pair emerging the outperformer across the fx board into New Year trades.

AUD/USD clings to gains above 0.72 handle

Currently, the AUD/USD pair rises +0.21% to 0.7214, reverting to daily tops reached previously at 0.7224. The AUD/USD pair is seen extending its recent stretch of gains on the first trading day of 2017, as persisting weakness in the US treasury yields continue to underpin demand for the emerging market currencies as an alternative higher yielding asset.

Moreover, higher copper prices combined with extension of the pullback in the buck, also keeps the sentiment around AUD/USD buoyed. However, the major is seen struggling to extend the gains further as markets continue to weigh weaker-than expected official Chinese manufacturing and services PMI reports published over the weekend.

Meanwhile, AUD/USD pair ended 2016 with over 1% loss, and in 2017 all eyes will remain on the divergent monetary policy outcomes between the Fed and RBA, while China economic concerns will also emerge a main driver.

AUD/USD Levels to watch   

The pair finds the immediate resistance at 0.7250 (key resistance) above which gains could be extended to the next hurdle located 0.7277 (20-DMA) and 0.7300 (zero figure). On the flip side, the immediate support located 0.7200 (round figure). Selling pressure is likely to intensify below the last, dragging the Aussie to 0.7182 (daily S2) and below that at 0.7154/52 (multi-month lows).