AUD/USD retreats from 2020 peaks near 0.7280

• AUD/USD clinched fresh 2020 tops near 0.7280 earlier on Wednesday.
• The firm note in the riskier assets boosts the upside in the Aussie dollar.
• Next of note in the domestic docket will be the flash PMIs on Friday.

The upside momentum in the Australian dollar appears unabated on Wednesday, lifting AUD/USD to new YTD peaks around 0.7275.

AUD/USD bid on solid risk-on sentiment

The rally in AUD/USD stays well and sound so far on Wednesday, up for the fourth consecutive session and trading in levels last seen in February 2019 near 0.7280. In fact, the continuation of the improved mood in the risk complex has given extra legs to the pair’s rally, which is navigating its ninth consecutive week in the positive territory and already gaining more than 32% since March lows in the 0.5500 neighbourhood. The weekly upside in AUD/USD comes despite the RBA minutes (Tuesday) confirmed the dovish stance from the central bank after policymakers stressed that the current accommodative stance is forecasted to remain in place for as long as needed. Earlier in the session, the Leading Index tracked by the Westpac/Melbourne Institute came in at 0.1% MoM (from 0.5%). Moving forward, Markit will publish its preliminary prints of the manufacturing and services PMIs for the current month on Friday.

AUD/USD levels to watch

At the moment the pair is advancing 0.32% at 0.7265 and a breakout of 0.7275 (2020 high Aug.19) would aim for 0.7295 (2019 high Jan.31) and finally 0.7393 (monthly high Dec.3 2018). On the flip side, the next support emerges at 0.7076 (monthly low Aug.3) seconded by 0.7024 (55-day SMA) and then 0.6776 (low Jun.15).