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AUD/USD remains above 0.6500 amid weaker dollar ahead of US PCE.

  • AUD/USD recovers from an intraday drop on Friday and is back near the weekly high.
  • The decline in US bond yields and the positive risk tone weaken the dollar and offer support to the pair.
  • Recession fears and expectations of an aggressive Fed rate hike cap USD losses and cap the pair.

The pair AUD/USD attracts some buying around the 0.6475 area on Friday and rises to a new daily high during the European session. The pair is now above the psychological level of 0.6500although it lacks bullish conviction.

A combination of factors is dragging the US dollar lower for the third day in a row and offering some support to the AUD/USD pair. The effect of the UK central bank’s move to calm markets drags the benchmark 10-year US Treasury bond off 12-year highs hit earlier this week. Apart of this, a nice recovery in global risk sentiment weighs on the safe-haven dollar and it encourages some monetary flows towards the AUD, of higher perceived risk.

Despite the supporting factors, AUD/USD is struggling to gain significant traction. Mixed data on business activity in China raises concerns about a deeper global economic downturn and should dampen market optimism. Also, Aggressive expectations around the Fed could revive demand for the dollar and cap the AUD/USD pairwarranting caution before positioning for an extension of this week’s bounce from the lowest level since April 2020.

Investors seem to be convinced that the US central bank will continue to raise interest rates at a faster pace to curb persistently high inflation. Hence, the focus remains on the US PCE personal consumption expenditure release, the Fed’s preferred gauge of inflation. These data, along with US bond yields and risk sentiment in Overall, they will weigh on the dollar and provide a further boost to the AUD/USD pair later in the American session.

Also on Friday’s US economic docket will be the Chicago PMI and the revised Michigan Consumer Sentiment Index. This could allow traders to take advantage of some short-term opportunities around the AUD/USD pair on the last day of the week.

AUD/USD technical levels

AUD/USD

Overview
last price today 0.6514
Today I change daily 0.0014
Today’s daily variation in % 0.22
Daily opening today 0.65
Trends
daily SMA20 0.6682
daily SMA50 0.6844
daily SMA100 0.691
daily SMA200 0.708
levels
Previous daily high 0.6526
Previous Daily Low 0.6436
Previous Weekly High 0.6748
Previous Weekly Low 0.6512
Previous Monthly High 0.7137
Previous Monthly Low 0.6835
Daily Fibonacci of 38.2% 0.647
Daily Fibonacci of 61.8% 0.6491
Daily Pivot Point S1 0.6449
Daily Pivot Point S2 0.6397
Daily Pivot Point S3 0.6359
Daily Pivot Point R1 0.6539
Daily Pivot Point R2 0.6577
Daily Pivot Point R3 0.6628

Source: Fx Street

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