- AUD / USD lost traction after climbing above 0.7200 on Friday.
- The market mood turns cautious ahead of the weekend.
- The US Dollar Index stabilizes on the day near 92.50.
The pair AUD/USD It rose to a daily high of 0.7410 on Friday, but lost its traction during the US session. At time of writing, the pair was up 0.13% on the day at 0.7375.
The observed negative shift in market sentiment appears to be making it difficult for the pair to maintain its bullish momentum ahead of the weekend. The S&P 500 Index, which opened in positive territory, is currently shedding 0.2% on the day at 4,484.
On the other hand, the US dollar index (DXY) is also experiencing a rebound from the daily low that touched at 92.33. At the moment, the DXY is practically unchanged on the day at 92.49.
US data showed on Friday that the annual Producer Price Index (PPI) advanced to a new series high of 8.3% in August from 7.8% in July. Meanwhile, Federal Reserve Bank of Cleveland president Loretta Mester said she would still like to start reducing asset purchases sometime this year despite the weak August jobs report.
AUD / USD outlook
According to currency strategists at UOB Group, AUD / USD could fall back to 0.7320 in the near term.
“The AUD is likely to consolidate and trade within a 0.7320 / 0.7460 range,” analysts said. “Looking ahead, only a daily close below 0.7320 would signal the start of a deeper pullback. At this stage, the outlook for the AUD below 0.7320 is not high.”
Technical levels
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