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AUD / USD jumps above 0.7250 as US dollar retreats

  • The DXY fell for the first time in five days, despite the decline in US stocks.
  • AUD / USD recovers sharply from monthly lows and clears weekly losses.

The AUD/USD gained momentum during the US session and jumped to 0.7255, reaching a new daily high driven by a correction in the US dollar across the board.

The DXY falls 0.20%, registering the first decline after rising for four consecutive days. The index peaked at 94.50, earlier on Thursday, the highest level in a year, and then fell back to 94.15.

The dollar weakened even as US stocks are mixed and despite stable US bond yields. The 10-year US yield stands at 1.53% and the Dow Jones falls 0.34% while the Nasdaq rises 0.38%.

Economic data from the US showed second-quarter GDP rose to 6.7% (revised from 6.6%) and initial jobless claims rose for the third consecutive week to 362,000 versus expectations of a decline to 335,000. . Fed Chairman Powell is speaking again in Congress. Some inflation relief is expected during the first half of next year.

From a technical perspective, the bounce in AUD / USD so far looks like a correction, but if it manages to stay above 0.7220, the downward pressure seems eased. The next resistance is seen at 0.7280 and then comes the key level of 0.7315.

Technical levels

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