There should be further near-term Australian dollar support below the 0.7850 level against the US dollar. Consolidation is liable to dominate for now with tough resistance at the 0.80 level.

The Australian dollar found support below the 0.7850 level against the US dollar during Monday and was able to stage a steady recovery during the past 24 hours. The currency gained support from a general correction weaker in the US dollar while higher commodity prices also offered support.

The domestic economic data was supportive with a significant improvement in business confidence according to the latest NAB survey. Trends in risk appetite will still tend to dominate in the short term and sentiment should hold relatively firm which will limit selling pressure on the currency. A key feature is likely to be strong buying support on any significant retreats