Flat As Commodity Rally Pauses

AUD/USD ventured higher in the European session and tipped 0.7385 but as US markets joined the fray the pair retreated and finished broadly flat; the pair last down 2 pips at 0.7348.

• The commodity rally took a breather today which took the winds out of the sails of AUD. CBA notes: "Electricity supply constraints in China, the UK and Europe suggest volatility in commodity prices and AUD can continue in the near term."
• From a technical perspective AUD/USD showed above the Monday high ahead of the Tuesday London close. The pair has recently cleared both the 20- and 50-day EMAs and although the recovery is considered corrective, the break higher suggests scope for an extension. The focus is on 0.7405 next, a Fibonacci retracement. A break would expose 0.7478, Sep 3 high and a key short-term resistance. Support levels to watch lie at 0.7226, Oct 6 low and 0.7170, Sep 29 low. The latter is a bear trigger.
• Domestically Westpac consumer confidence is the only release today, markets will watch Chinese trade balance data which is on the docket for later in the session.