AUD / USD bounces above 0.7750, appears to post modest weekly gains

• AUD / USD started to rise after falling to 0.7724.
• The US Dollar Index consolidates daily gains around 91.70.
• Consumer confidence in the US improved dramatically in February.

The pair AUD/USD It fell to a daily low of 0.7724 in the early trading hours of the US session, but began to recoup its losses. At time of writing, the pair was still down 0.25% on the day at 0.7767. On a weekly basis, the pair is still on track to close higher and break a two-week losing streak.

The USD appears to have started to lose steam in the second half of the day even though the 10-year US Treasury yield is increasing more than 5%. Weekend flows and profit taking towards the end of the European session may have played a role in the renewed weakness of the USD. At time of writing, the US Dollar Index was up 0.25% on the day at 91.67.

Earlier in the day, US data showed that the Leading Producer Price Index (PPI) in February rose to 2.5%, compared to analysts’ estimate of 2.6%, on an annual basis from 2% in January.

Additionally, the University of Michigan consumer sentiment index in March’s advanced estimate improved sharply to 83 from 76.8 in February. With this reading beating the market expectation of 78.5 by a wide margin and helping to improve market sentiment, the dollar is struggling to preserve its strength.

AUD / USD outlook

Looking at a preview of possible moves for the AUD / USD over the next 1-3 weeks, “the current move is seen as a consolidation phase and the AUD is likely to trade within 0.7645 / 0.7820,” strategists said. of the UOB Group. “That being said, short-term momentum has improved a bit and the AUD could break above 0.7820, but only a clear breakout of 0.7860 would indicate that the AUD is ready to climb steadily.”

Technical levels