AUD/USD clings to record high trade surplus data-led strong gains

The AUD/USD pair built on upbeat Australian data-led strong break-out momentum above 0.7600 handle and soared to nearly three-month tops. The pair, however, has retraced few pips from highs and is currently trading around 0.7634-40 band. 

Australian data released on Thursday showed country's trade surplus surged in December to a record A$3.511 billion, where as the markets were looking for a surplus of A$2 billion. A record trade surplus-data helped the pair to break through its recent consolidative trading range and rally to the highest level since Nov. 10. 

Meanwhile, building approvals were also not as disappointing as expected, coming-in at -1.2% for December as compared to -2.0% expected and November's 7.5% (revised higher from 7.0% growth reported earlier), and also supported strong bid tone surrounding the Australian Dollar. 

Also collaborating to the pair's strong up-surge on Thursday was renewed greenback selling pressure. In fact, the key US Dollar Index dropped to its lowest levels since mid-November on Thursday after the Federal Reserve disappointed investors hoping for a more hawkish policy stance. 

Moreover, positive sentiment around commodity space, especially copper, further extended support to the commodity-linked currencies – like the Aussie.  

Later during NA session, the release of weekly jobless claims would now be looked upon for some immediate respite for the USD bulls, ahead of Friday’s Caixin Chinese manufacturing PMI and the keenly watched NFP data.

Technical levels to watch

A follow through buying interest above 0.7650 level is likely to lift the pair towards 0.7680 intermediate barrier, en-route 0.7700 handle. Meanwhile on the downside, 0.7610-0.7600 area now becomes immediate support to defend, which if broken could accelerate the slide towards 0.7585-80 support ahead of its next major support near 0.7555-50 horizontal area.