AUD/USD intermarket: pressured on commodities and resurgence in the DXY, eyes on geopolitical risks

Currently, AUD/USD is trading at 0.7588, down -0.21% on the day, having posted a daily high at 0.7634 and low at 0.7571.

AUD/USD has picked up a bid despite metals still being in the red and the dollar that has been broadly firmer against the majors as the holiday-shortened week resumes for the US. Most commodity prices are lower, with WTI down 1.73% and copper down 0.98%. 

RBA refuses to join hawks due to strong AUD

AUD/USD is in a minor correction this week after the Reserve Bank of Australia's rate decision last week, going against the collective shift in tones from its counterparties. The RBA seems intent on protecting against a rising Aussie and markets are happy to go with that sentiment for the time being. The dollar is stronger today, +0.12% at the time of writing.

U.S. data released Wednesday showed that May factory orders declined more than expected, while the final reading on durable goods orders showed a decline of 0.8%, matching preliminary data. All eyes are now on the FOMC minutes of the June 13-14 meeting today. However, we have listened to the core members speaking since that meeting and we also have Yellen’s Congressional testimony next week, so today's minutes may have less of an impact outside of any big surprises. Markets are, however, looking for a hint at an autumn start to the balance sheet reduction. 

Pentagon: North Korea's ICBM was a new type of missile that 'we've not seen before' - Reuters

An additional theme to markets currently is how N.Korea has said its ICBM can carry nuclear warhead; U.S. has called for global action and almost immediately announced a new joint military exercise with S.Korea. However, there does not appear to be support for military options by South Korea, Japan, Russia, or China.

AUD/USD levels

Analysts at Commerzbank explained that AUD/USD has failed at the top of its converging range. "The market has failed on its initial test of top of the triangle at 0.7710. It has already eroded its short-term uptrend and we suspect that we will see a slide back towards the 200 day ma at 0.7530. Failure here would signal a slide to the bottom of the range at 0.7348."