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AUD / USD is trading at recent monthly highs above 0.7400

  • AUD / USD breaks above 0.7400 for the first time in a month.
  • Risk sentiment in the market has investors turning to riskier assets, pushing the AUD up.
  • Initial jobless claims in the US fell below 300,000.

The AUD It is up 0.58% and is trading at 0.7423 during the American session at the time of writing. Market sentiment is optimistic, reflected in the rise in the European and US stock indices. Positive US macroeconomic data on the labor market and prices paid by US producers are fueling investors’ risk appetite.

DXY breaks below 94.00, supported by falling US Treasury yields.

The US dollar index that measures the dollar’s performance against a basket of six rivals is sliding 0.03% to 93.99, while the yield on the 10-year US Treasury is struggling to hold its ground. of the previous day, it stands at 1,526%.

Turning to the data, the Australian economic agenda released the employment report, which showed that the economy lost 138,000 worse-than-expected jobs in September, while the unemployment rate rose to 4.6%.

On the US front, US Initial Unemployment Claims came in at 293,000 better than the 319,000 predicted by analysts, delivering positive news on the job market while increasing the chances that the Federal Reserve will downsize to the pace of quantitative easing. In addition, the US Producer Price Index increased 8.6% less than the estimated 8.7%, while excluding food and energy, it expanded 6.8% below the 7.1% expected.

That said, positive news during the day benefited risk-sensitive currencies such as the Australian dollar, which recovered the thresholds of 0.7400. However, oscillating market sentiment due to changing economic conditions could put a damper on AUD / USD.

AUD / USD Price Forecast: Technical Outlook
Daily chart

AUD / USD is trading above the 100-day moving average (DMA) at 0.7416, while the 200 DMA is above the spot price, indicating that the main trend is leaning lower. However, the momentum indicators with the Relative Strength Index (RSI) at 64, pointing higher, suggest that the short-term trend is leaning higher.

For AUD / USD buyers to resume the uptrend, they need a daily close above the 100 DMA. In that result, the first resistance would be the September 3 high at 0.7478. A breakout of the latter could expose crucial support levels, on July 6 at 0.7599 and then the psychological level 0.7700.

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