- AUD / USD is consolidating part of Thursday’s losses, trading above 0.7220.
- Ahead: PPI data and US consumer confidence.
The AUD / USD lost 50 pips on Thursday in a day of falls in the markets and on Friday it is recovering part of that fall, before an improvement and some weakness of the dollar. Thursday’s pullback found support at the 0.7220 area, from where it bounced. The pair recently hit a high for the day at 0.7263 before falling back to 0.7245.
The optimism that followed the news about the vaccine faded in time with the increase in cases of coronavirus in Europe and the US that led to new restrictions on circulation. The dollar looks weak on Friday due to the rebound in the stock markets and a fall in the yields of Treasury bonds.
Market attention continues on US policy, the evolution of the coronavirus, and US data to be released. The latter include the wholesale inflation and consumer confidence report. In addition, comments from James Bullard and John Williams, members of the FOMC, will be closely followed.
AUD / USD outlook
“While 0.7200 is still intact, the bullish momentum has faded considerably and the possibility of the AUD moving towards 0.7413 has dissipated,” UOB Group analysts noted. They consider that the AUD / USD has entered a consolidation phase and it is likely to trade between 0.7130 and 0.7305 over a period of time.
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