- AUD / USD is moving lower amid a bounce in the US dollar fueled by risk-off sentiment.
- Weaker than expected Australian retail sales add to the downside.
- Markets await US Markit PMIs and Biden’s speech for new signals.
He AUD/USD moves lower during the European session on Friday, falling below the 0.7720 region, as the rally in the US dollar gains momentum amid risk-off sentiment.
He Skepticism has grown around the approval of the ambitious $ 1.9 trillion stimulus package of US President Joe Biden in Congress, which has weighed on the market mood, benefitting the demand for the safe haven US dollar.
In addition, the major world economies are still fighting the rise in coronavirus, despite the launch of the vaccines, which has revived concerns about global economic growth. Therefore, investors flock towards the safe-haven USD at the expense of higher-yielding assets like AUD.
Further, The Aussie has also struggled as preliminary December retail sales in Australia showed a big drop from 4.2% MoM in December. The decline in gold and oil prices is also negative for commodity price currencies such as the AUD.
The focus is now on the preliminary US Markit PMIs and Biden’s speech for new business leads. Meanwhile, risk-off money flows and USD dynamics will continue to have a significant influence on AUD / USD.
AUD / USD technical levels
“The immediate technical bias remains neutral. This is because the pair is still trapped within a channel represented by trend lines connecting the highs on January 6 and 14 and the lows on January 11 and 18. A break to the upside would imply a continuation of the broader uptrend and move in favor of a rally to 0.80, “notes FXStreet analyst Omkar Godbole.
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