AUD/USD retreating from daily highs below 0.7550

• AUD/USD is retreating from daily highs in the 0.7550 region.
• Advancing commodity prices and USD profit-taking behind the recent AUD/USD surge higher.

The AUD/USD is trading at around 0.7543 up 0.12% on Friday.

The Aussie gained about 150 pips from the lows made this Wednesday and the pair flirted with 0.7570 in Friday’s American session. The pair is now consolidating below the 0.7550 area. 

The commodity-linked currency is having a boost this week on a combination of rising gold and copper prices as well as profit-taking on the US dollar. 

Earlier on Friday, Fed’s Bullard hit the wire with rather dovish comments saying “ Rates may already have reached a “neutral” level that is no longer stimulating the economy,” adding “there are reasons for caution in raising the policy rate further given current macroeconomic conditions” and “further hikes could leave inflation expectations short of the central bank’s goal, compress business investment and upset healthy labor market conditions.”

The US Dollar Index, which measures the greenback relative to a basket of currencies had a 5% advance since late March and is now consolidating in the 92.50 region. Behind the massive bull leg in the buck is the market's anticipation of three to four rate hikes from the Federal Reserve Bank in 2018. 

However, since the Non-Farm Payroll and the April's inflation in the US were lower-than-expected, investors have started taking profits off the table on the USD long trade.

AUD/USD 4-hour chart 

The AUD/USD is testing the 0.7560 swing high and the 100-period simple moving average on the 4-hour chart. As the week is coming to an end it wouldn’t be surprising to see some investors taking profits at this key level. Support is seen at the 0.7500 figure and demand level and at 0.7412 cyclical low. To the upside, bulls will need to break 0.7560 resistance and then 0.7590 previous supply level.