- DXY falls across the board amid declining returns and risk appetite.
- AUD / USD recovers further from multi-month lows.
The AUD/USD It bottomed Thursday at 0.7531, the lowest level in three months, and then rallied abruptly. After the start of the US session, it rose even higher and reached a new daily high at 0.7607.
At time of writing, the AUD / USD is trading at 0.7603 modestly higher for the day, and is testing the 20 SMA on the four-hour chart. A consolidation above would strengthen the short-term outlook for the Australian dollar.
The key driver of the rally is the decline in the US dollar. The DXY falls for the second day in a row and falls back below 93.00. Falling US bond yields and rising stock prices weigh on the dollar.
US 10-year yields are down nearly 4% to 1.67%, while the Dow Jones is up 0.35% and the Nasdaq up 1.45%. Optimism got a boost from US data with the ISM manufacturing index rising more than expected to the highest level since 1983. On Friday, the official US employment report is due.
Technical levels
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