AUD/USD surges through 0.80 handle, hits fresh one-month highs

Persistent softer tone around the greenback pushed the AUD/USD pair through the key 0.80 psychological mark to over one-month highs. 

Concerns over deteriorating relationship between the US and North Korea got elevated after the US President Donald Trump tweeted on building strategic forces in Japan and South Korea. 

The US Treasury bond yields tumbled in the knee-jerk reaction to these headlines, which weighed heavily on the US Dollar and has been one of the key factors benefitting higher-yielding currencies - like the Aussie. 

Against the backdrop of recent upbeat Chinese PMI numbers, a strong bullish sentiment around commodity space, especially copper, provided an additional boost to the commodity-linked currencies and further collaborated to the pair's up-move through early NA session. 

Meanwhile, possibilities of some stops being triggered on a decisive move beyond 0.7985 hurdle also seems to have contributed to the pair's sharp spike of around 30-40 pips over the last hour.

On the economic data front, the release of US factory orders data would be largely overshadowed by escalating geopolitical tension. Meanwhile, speeches from Minneapolis Fed President Neel Kashkari (later during NY session) and Dallas Fed President Robert Kaplan (early Asian session on Wednesday) might provide some impetus ahead of the latest Australian GDP growth figures.

   •  Australia: Economic partials point to GDP growth in Q2 of 0.6% q/q - NAB

Technical levels to watch

A follow through buying interest has the potential to continue boosting the pair towards 0.8043 level (early August high) ahead of 0.8066 (July 27 high). On the flip side, the 0.7990-85 region now becomes immediate support to defend, which if broken could drag the pair back towards mid-0.7900s en-route the 0.7900 handle.