AUD/USD eases of from session highs, still above 0.74

The AUD/USD pair jumped to a fresh session high at 0.7446 at the beginning of the NA session but lost some of its bullish momentum as the greenback started to consolidate its losses against its rivals. The pair is now trading at 0.7430, still up 0.6% on the day.

Following the dismal Empire State Manufacturing Index released by the Federal Reserve Bank of New York, the US Dollar Index fell to its session low at 98.67 before starting to retrace some of its losses. The latter data from the U.S. revealed that the NAHB Housing Market Index continued to improve in May and advanced to 70 from 68 in April, helping the greenback take a breather. At the moment, the index is at 98.75, down 0.3% on the day.

In the meantime, the U.S. Treasury bond yields are holding on to their gains, with the 10-year reference up 0.3% on the day, helping the DXY limit its losses. However, the fact that the probability of a June rate hike dropped below 70% could continue to weigh on the index. 

Technical outlook

0.7450 (20-DMA) could be seen as the immediate resistance for the pair ahead of 0.7540 (200-DMA) and 0.7580 (100-DMA). To the downside, supports are located at 0.7400 (psychological level), 0.7330 (May 9 low) and 0.7285 (Jan. 6 low).

• AUD: Daily close above 0.7440 could break the current downtrend - Westpac
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