- The dollar gains momentum during the American session, as US yields rise.
- Markets are oscillating after US economic data, ahead of next week’s central bank meetings.
- AUD/USD falls after a four-day positive streak.
The pair AUD/USD it fell from the highest level since June during the American session, after the US dollar gained momentum. The pair reached a high of 0.7141 and then retraced more than 50 points. It is now around 0.7080, close to the daily lows.
The Australian dollar is heading for its first daily loss against the US dollar after four straight days of gains. The trend is still up, but if the current correction deepens, it could turn into a reversal. Next support lies at 0.7060 (Jan 25 low), followed by 0.7025. To the upside, a consolidation above 0.7120 would keep the doors open for further gains.
Markets digest new information
Despite encouraging economic figures released on Thursday, the outlook is unclear, with mixed signals and higher interest rates: “Monthly data indicates that while the economy entered the fourth quarter with strong momentum, it ended the quarter with a clear loss of momentum. Growth is likely to be weak, at least relative to the last two quarters of 2022, into the first quarter of 2023,” Wells Fargo analysts said.
Yields in the US ended up higher on the economic reports, while US stocks moved from highs, favoring the US dollar. The DXY remains above 102.00 after earlier reaching its lowest level since May. The dollar’s downtrend remains, but it doesn’t look as strong as it did two weeks ago.
Next week, the Federal Reserve will announce its monetary policy decision and a 25 basis point rate hike is expected. Market participants do not consider this to be the last rise.
On Friday, Australia will report the Producer Price Index for the third quarter. The Reserve Bank of Australia’s next monetary policy meeting will be on February 7. Market participants see a rate hike of 25 basis points.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
