AUD/USD refreshes session tops post dismal US housing market data

The AUD/USD pair maintained its strong bid tone through early NA session and spiked to fresh session tops near tops near 0.7860-65 region after disappointing US housing market data. 

The pair held on strong Australian wage price data-led recovery move from one-month lows and continued gaining traction on weaker than expected US housing starts and building permits data. According to the data released just a while ago, housing starts tumbled to an annualized pace of 1.155 million units in July, down 4.8% from 1.215 million units in the previous month. 

Adding to this, a larger than expected drop of 4.1% in building permits, coming in at an annual pace of 1.223 million units for July as compared to previous month's 1.254 million did little to provide any additional boost to the US Dollar recovery move led by yesterday's upbeat monthly retail sales data.

Meanwhile, strong gains in copper prices also benefitted commodity-linked currencies, including the Australian Dollar, and remained supportive of the strong bid tone surrounding the major. 

With the US economic data out of the way, it would now be interesting to see if the pair is able to build on the up-move of enters a consolidation phase ahead of today's key event risk. The much-awaited FOMC meeting minutes would throw some fresh light over the central bank's near-term monetary policy outlook and eventually determine the next leg of directional move for higher-yielding currencies - like the Aussie. 

   •  FOMC minutes in the limelight – Danske Bank

Technical levels to watch

A follow through momentum beyond the 0.7870-75 region could get extended towards the 0.7900 handle en-route an important horizontal resistance near 0.7910-15 area. On the flip side, retracement back below 0.7840-35 area is likely to find support near the 0.7800 handle, which if broken could turn the pair vulnerable to aim towards testing 50-day SMA support near mid-0.7700s.