- AUD / USD lost its traction after rising early in the American session.
- The US dollar index turned north after Wall Street opened lower.
- AUD / USD is still on track to post weekly losses.
The pair AUD/USD it spent the first half of the day trading in negative territory near 0.7650, but gained traction early in the US session with the USD losing its strength. However, the risk averse market environment did not allow the pair to extend its rebound and the AUD / USD was last seen shedding 0.22% on the day at 0.7662. On a weekly basis, AUD / USD remains on track to close in negative territory.
The initial market reaction to the US data caused the US Dollar Index (DXY) to drop to a daily low of 90.36. However, the risk-averse market environment, reflected in sharp declines in major Wall Street indices, helped DXY rebound. At time of writing, the index was posting small daily gains at 90.53 and the S&P 500 lost 1.37%.
Hours earlier, the US Bureau of Economic Analysis reported that Personal Income in December increased 0.6% and Personal Spending fell 0.2%, which was better than the market’s expectation of a 0.4% decrease. In addition, the price index for basic personal consumption expenditure (PCE) rose to 1.5% annually in December and beat analysts’ estimate of 1.3%.
Technical perspective
UOB Group analysts believe that AUD / USD is likely to remain under pressure for the next 1-3 weeks. “Risk has rapidly shifted lower and the AUD is likely to trade a bearish bias towards 0.7560,” the analysts noted. “On the upside, a breakout of 0.7730 would indicate that downside risk has dissipated. On a short-term tone, 0.7700 is already a strong level.”
Additional levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
