AUD / USD recovers from multi-week lows and rises to 0.7320

• Risk appetite triggers some profit taking around USD and helps AUD / USD gain traction.
• The Fed’s optimistic expectations should help limit the USD’s pullback and limit the pair’s rise.

The pair AUD/USD is extending its steady intraday rise during the European session on Friday, climbing to new Daily highs around the 0.7320 region in the last hour.

The pair has managed to gain some positive traction on the last trading day of the week and has recovered a significant part of the previous day’s drop to three-week lows. The underlying bullish sentiment has triggered some profit taking around the US dollar safe haven, which in turn has been seen as a key factor that has benefited the higher perceived risk Australian dollar.

Aside from this, the rally lacks any fundamental catalyst and risks ending quickly amid expectations of an imminent Fed announcement. concerns about the Delta variant Fast-spreading, the US retail sales report released Thursday underscored consumer confidence and signaled continued economic recovery.

The data fueled speculation that the Fed would begin reversing its massive pandemic-era stimulus sooner rather than later. This should continue to act as a tailwind for the USD and limit any significant rally for the AUD / USD pair. Therefore, it will be wise to wait for a few follow-up purchases before positioning yourself for any additional profit.

Market participants are now awaiting the publication of the preliminary index of consumer sentiment from the University of Michigan in the United States, which will be released at the beginning of the American session today. The data could sway the USD and provide some boost to the AUD / USD pair. Investors could continue to take cues from broader market risk sentiment and seize some opportunities around the pair.

AUD / USD technical levels