AUD/USD consolidates after recent upsurge to over 2-year highs

The AUD/USD pair held on to its daily gains and now seems to have entered a consolidation phase near 26-month highs, just below mid-0.7900s.

The pair built on previous session's impressive gains, led by perceived hawkish RBA minutes and broad based US Dollar sell-off, and touched the highest level since May 2015. However, a modest pickup in the US Treasury bond yields, which underpinned the greenback demand, was seen keeping a lid on any further up-move for higher-yielding currencies - like the Aussie.

Moreover, a subdued action around commodity space, especially copper, has also failed to provide any fresh bullish impetus for the commodity-linked currency and the pair remained capped below mid-0.7900s, at least for the time being.

Meanwhile, traders also seemed reluctant to initiate any fresh bullish bets amid near-term overbought conditions and ahead of Australian jobs data, due for release during Asian session on Thursday. In the meantime, today's US housing market data - building permits and housing starts, would be looked upon to grab some short-term trading opportunities. 

Technical levels to watch

Valeria Bednarik, Chief Analyst at FXStreet writes: "In the 4 hours chart, technical indicators have begun retreating from extreme overbought territory, but the price's pullback has been shallow, whilst the 20 SMA continues heading sharply higher below the current level, all of which maintains the risk towards the upside. Beyond today's high,  the rally could extend up to the 0.8060/70 region during the upcoming sessions, where the pair presents multiple monthly highs and lows from the last decade."