AUD / USD bounces to 0.7350 on improved risk sentiment

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  • AUD / USD reversed its direction in the second half of the day.
  • The US dollar index appears to break the four-day winning streak.
  • The major Wall Street indices continue to trade in positive territory.

The pair AUD/USD It fell to its lowest level in 2021 at 0.7290 during European trading hours, but achieved a recovery in the US session. At time of writing, the pair was up 0.28% on the day at 0.7350.

DXY rally loses steam

Hours earlier, data from Australia revealed that the Westpac Leader Index fell to -0.06 in June from 0.04 in May. Additionally, the Australian Bureau of Statistics announced that Retail Sales contracted 1.8% in June, disappointing the market’s expectation of a 0.5% drop.

In addition to disappointing data releases, widespread USD strength weighed on AUD / USD for the first half of the day as the US Dollar Index (DXY) rose to its highest level since early April at 93.19.

Nonetheless, the observed positive shift in market sentiment helped the risk-sensitive AUD find demand and forced the dollar to weaken against its rivals. The DXY is currently down 0.17% on the day at 92.80 and is looking to break a four-day winning streak. Reflecting the positive risk environment in the market, the S&P 500 Index, which gained more than 1% on Tuesday, rose 0.42% to 4.341.

On Thursday, the National Bank of Australia’s business confidence for the second quarter will be seen as further boost.

Technical levels

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