AUD/USD inter-markets: Intraday reversal likely on commodities rally?

The Aussie is on a rising trend so far this week, having witnessed a more-than 200 pips recovery from seven-troughs reached last week at 0.7488.

The spot stalled its recent upbeat momentum and reversed a part of FOMC-backed gains this Thursday, on the back of a poor Australian employment data, which surprised markets on the downside. Employment numbers fell by -6k jobs in February versus 16k expected and the unemployment rate rose to 5.9% versus 5.7% predicted.

However, over the last hours, the Aussie is seen undergoing a bullish intraday reversal, as the downside remains capped by the daily pivot. The potential reversal in the major can be mainly driven by a broader rally seen in commodities from metals to energy, with the main driver being an extension of the rebound in copper prices. The red metal extended the upside and clocked fresh nine-day tops at $ 2.696/ pound.

Moreover, the ongoing minor-correction in the US dollar versus its major rivals, is seen losing steam, which also could fuel the bounce in AUD/USD. However, the only negative factor that could restrict the upturn is the rebound in treasury yields, which could diminish demand for the AUD as an alternative higher yielding currency.

In terms of technicals, “a break above 0.7741 (Feb 23 high) would open doors for 0.7778 (Nov 8 high). A violation there on the daily chart could see the spot target 2016 high of 0.7835. On the downside, strong support is seen at 0.7649 (Feb 21 low), which, if breached could yield a sell-off to 0.76 (zero figure) and possibly to 0.7580 (Mar 14 high), “Omkar Godbole, Analyst at FXStreet noted.