AUD/USD: consolidating the channel highs

AUD/USD is consolidating the highs scored earlier in the US session within a continuation of the bid in AUD/USD.

Markets are fixated on the yield spreads currently which point towards a lower Aussie in the longer term should the market continue to factor in a rate rise from the Fed. However, for the meantime, we are seeing a rebound in the commodity prices and risk appetite underpinning near term string in the Aussie.

"The AUD/USD pair was unable to hold onto its latest gains, retreating down to the current 0.7700 region" noted Valeria Bednarik, chief analyst at FXStreet who added, "During the past Asian session, the  RBNZ delivered a 25bps cut in the cash rate and the NZD rallied initially, as the decision was short of market expectations, but ended up reversing course as the day went by, dragging Aussie alongside. 

Renewed dollar's demand in the US afternoon after FED's William revive hopes for a rate hike in the US this year. Still, the Australian dollar is far from entering a bearish trend in the mid to long term, still looking to retest its year high against the greenback or even extend higher."

How volatile has AUD/USD been?

Hourly 2-Standard Deviation Volatility Bandwidth is currently 24 pips, and has been shrinking, while the ATR (14) is currently 13 pips. Daily 2-Standard Deviation Volatility Bandwidth is at 287 pips and expanding. The average movement for the current hour has been for 13 pips per hour, over the last four weeks. Meanwhile, 1:00-2:00 GMT represented peak for volatility, with an average movement of 26 pips over the same period.

What price levels and patterns have to be considered?

With spot trading at 0.7706, we can see next resistance ahead at 0.7707 (Daily Classic PP), 0.7709 (Hourly 20 EMA), 0.7752 (Daily Classic R1), 0.7757 (Yesterday's High) and 0.7760 (Daily High). Support below can be found at 0.7703 (Daily Open), 0.7702 (Monthly High), 0.7702 (Weekly High), 0.7694 (Weekly Classic R1) and 0.7691 (Daily Low).