- DXY falls towards daily lows propelling AUD / USD towards weekly highs.
- The Aussie continues to outperform AUD / NZD back to 1.0700.
He AUD/USD it gained momentum and bounced from 0.7688 to 0.7732, reaching a new daily high, slightly below the recent peak at 0.7741. It remains near the highs, supported by a decline in the US dollar across the board.
DXY Under Pressure Despite Positive US Data
The dollar weakened after the start of the US session and fell back. The US Dollar Index (DXY) is approaching the 89.50 zone after failing to climb back above 90.00.
The ISM manufacturing report did not boost the dollar. The main index rose to 60.7 in December, surprising market participants who expected a drop to 56.6. It was the highest reading since 2018. The sub-indices also beat expectations.
Wall Street publishes mixed numbers on Tuesday. Commodity-linked currencies are higher; Among them, the Australian dollar outperforms. AUD / NZD is back at the 1.0700 area after Monday’s pullback.
AUD / USD uptrend is intact
The main trend favors the Australian dollar against the dollar. After pulling back on Monday, the AUD / USD was back above 0.7700. A breakout of 0.7730 could lead to further gains.
Strong immediate support is seen around 0.7650. A break to the downside would ease the bullish pressure. Critical support could be seen at 0.7570, the convergence of the 20-day moving average, and a short-term bullish trend line. A consolidation below would open the door to a sharper downward correction.