AUD/USD: bulls losing sight of 0.74 handle, but risk sentiment remains elevated

• Aussie consolidating last week’s 100-pip bull move
• RBA for July 3rd is expected to leave its cash rate at 1.5%.
• AUD/JPY is currently bouncing towards Monday's highs as USD/JPY takes on the hourly 200-SMA.  

AUD/USD is holding a higher beta to the S&P which is currently performing robustly, allowing for a bounce in the Aussie, closely linked to the performance of commodities such as copper that is also recovering on Tuesday despite the dollar making back some ground. AUD/USD is currently trading at 0.7396, having recovered from a low of 0.7379 and had made a high of 0.7423. 

The greenback is trading at the higher end of the 94.1710-94.6490 range today, capping the progress in AUD/USD's recovery from the aforementioned lows. Overnight, lower commodity prices were weighing on the Aussie where the pair slipped below the Aisna range of 0.7403-0.7423  to 0.7392 with copper at a three month low and a zinc down at a 10-month trough, (Shanghai rebar falls to four-week low). 

US stocks picking up the bid, carrying risk sentiment in FX higher

However, US stocks have picked up a bid with the DJIA now up 0.40% and the S&P 500 up 0.46%, following suite of the tech-heavy NASDAQ outperforming at 0.72%. Investors seem to have shrugged off the uncertainty over trade policy, but this a factor that remains unresolved and risks rein titled to the downside in terms of risk, so eyes should be kept on AUD/JPY which currently bouncing towards Monday's highs as USD/JPY takes on the hourly 200-SMA.  

Meanwhile, the RBA for July 3rd is expected to leave its cash rate at 1.5%. It recently reinforced its dovish credentials, so the hawkish position of the Fed should be supportive of lower levels in the absence of sustained risk on rallies in sentiment. 

AUD/USD levels

AUD/USD Technical Analysis: Aussie consolidating last week’s 100-pip bull move

To the downside, 0.7380 is the first support while a break there will expose the May 2017 low (0.7328).  On the upside, the 10-D SMA is at 0.7431 while the 10-W SMA is located at 0.7516 through 0.7500 recent double bottom lows. A break of 0.7600 opens 0.7640 and then 0.7680 before the top of the channel where the 100-D SMA resides at 0.7709.