- AU / USD gained strong positive traction on Friday amid renewed USD sell bias.
- Falling US bond yields and disappointing US retail sales weighed heavily on the dollar.
- The scenario now looks set for a move towards the 0.7800 recovery.
The pair AUD/USD It built on the good bounce the day before from levels below 0.7700 and gained strong follow-up traction on the last trading day of the week. Momentum pushed the pair to two-day highs around the 0.7760-65 region during the early days of the American session.
A sharp drop in US Treasury yields, amid the Fed’s stubbornly dovish stance, sparked fresh selling around the US dollar on Friday. The already weaker USD lost some additional ground following the disappointing release of monthly US retail sales figures, which, in turn, was seen as a key driver behind the latest leg of a rally in the last hour or so.
From a technical perspective, the AUD / USD pair was last seen hovering around the 38.2% Fibonacci level of this week’s decline from the 0.7890 region, or the highest level since February 25. Since the technical indicators on the daily chart just started to pull back. In positive territory, some subsequent purchases will set the stage for additional earnings.
AUD / USD could accelerate momentum and aim to regain the 0.7800 round mark. This coincides with the 50% Fibonacci level, which if decisively cleared will negate any short-term bearish bias and push the pair past the 61.8% Fibonacci level, to challenge the next relevant hurdle near the weekly highs en route to the region of 0.7845-55, around the region of 0.7890.
On the other hand, the 23.6% Fibonacci level, around the 0.7735 region now seems to protect the immediate drop. This is closely followed by the rising trend line support near the 0.7720-15 region, which if decisively broken will turn the bias in favor of bearish traders. The subsequent decline has the potential to drag the AUD / USD pair towards test levels below 0.7700.
Sustained weakness below should pave the way for a slide towards the horizontal resistance breakout point of 0.7660, now turned into support, before the AUD / USD pair finally drops to 0.7600.
1 hour chart
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
