AUD/USD approaches 0.7600 as USD consolidates losses

• AUD/USD holds to gains, back near key technical resistance.
• A weak greenback and risk appetite supported the rally.

The Australian dollar is consolidating gains against the US dollar supported by a correction of the greenback and amid an improvement in global financial markets. The Italian political crisis continue to weigh on sentiment.

The AUD/USD pair rose to 0.7582, the highest level since Friday and it was hovering around 0.7570/75. The pair erased completely yesterday’s losses. It rose back above the 20-day moving average and it is having the best day in weeks.

US data released today (ADP and trade balance) had no impact on the US Dollar, neither the Beige Book that mentioned activity expanded moderately in late April, early May.  On Thursday personal income and spending numbers will be released and on Friday, the official employment report. In Australia, on Thursday Q1 CapEx spending is due.

The decline in the AUD/NZD pair limited the upside in AUD/USD. Against the Kiwi, the Aussie reached the lowest in 20 days, as it continues to correct lower.

AUD/USD Levels to watch

Today’s rally pushed the pair beak near a key resistance that is the 0.7580-0.7600 barrier. A consolidation on top of that range would clear the way to more gains. The next resistance might be seen at 0.7640.

If the pair fails to break above 0.7580, the Aussie is likely to lose momentum. Support levels might be located at 0.7540, 0.7520 and 0.7480/85.