AUD/USD has been one of the strongest performers this week, over the last five sessions in fact, with a convincing drift up towards the 200 dma at 0.7278, posing the questions as to whether it can take this psychological on and realistically continue strengthening. Technically yes, but fundamentally unlikely. Commodities have been one factor supporting the recovery from the opening 2016 sell-off from highs of 0.7301, a key objective, to the recent lows of that downtrend to 0.6827. While the Aussie is subject to fluctuations in a number of commodities, iron ore is of notable importance as being one of Australia's largest exports and the better tone in the commodity is on factor supporting strength i the Aussie, although analysts at Rabobank are sceptical as to ability of iron ore to maintain its upward momentum. The analysts at Rabobank also explained that another factor that could curtail the AUD this year is a broad based recovery in the USD. "The USD has fallen hard this year as the market priced out expectations of Fed rate hikes in 2016. In our view, this move may be overdone," explained the analysts noting that the modest improvement in US CPI inflation and wage data suggest signal there is an upward creep in US price pressures. "These are also signs that the pressure on the US manufacturing sector could be bottoming while the services sector remains robust. Overall, we maintain our expectation that AUD/USD could drop back below 0.70 on a 1 to 3 mth view." AUD/USD levels AUD/USD is en route to the 200 dma, but until the price can convincingly break that level, either a period of consolidation is likely or tiring bulls will give way to the bears targeting a break of the 100 and 50 dma's at 0.7151 and 0.7103 consecutively. On the downside, spot is located around the pivot of 0.7207 with S1 at 0.7165, S2 at 0.7095 and S3 at 0.7053 guarding 0.7000 psychological level. For more information, read our latest forex news.