AUD / USD enters consolidation after rising towards 0.7400

• AUD / USD loses traction after climbing towards 0.7400 on Wednesday.
• The Australian economy grew stronger than expected in the third quarter.
• The US Dollar DXY Index bounces towards 91.50.

The pair AUD/USD It extended Tuesday’s gains and rose to a daily high of 0.7393 during Wednesday’s Asian session. However, cautious market sentiment has allowed the USD to start to gain traction against its rivals, with the pair turning lower and falling to an intraday low of 0.7350. At the time of writing, the pair remains virtually unchanged on the day, hovering around the 0.7365 region and consolidating recent gains.

AUD fails to capitalize on optimistic Australian GDP data

Data released by the Australian Bureau of Statistics on Wednesday showed that gross domestic product real GDP in the third quarter expanded 3.3% on a quarterly basis. This reading comes after the 7.7% contraction recorded in the second quarter and exceeded the market expectation of 2.6%. However, the positive impact of this data on the AUD has been short-lived.

On the other hand, Wall Street’s record rally on Tuesday caused the US dollar to suffer heavy losses against its higher perceived risk rivals, like the AUD. The US Dollar DXY Index fell to its lowest level since April 2018 at 91.10, but is now making a technical correction just before the start of the American session.

Regarding US data, the US private sector increased payrolls by 307,000 in November as reported by ADP. The data was below the market consensus which was for a reading of 410,000.

Meanwhile, S&P 500 futures are posting modest losses, suggesting that AUD / USD could struggle to gain bullish momentum in the second half of the day if the monetary flows of risk appetite have difficulties to regain control of the financial markets.

AUD / USD technical levels