AUD/USD eases off daily highs as DXY pushes above 94
|- AUD/USD advanced to a fresh 6-day top on Tuesday.
- PPI readings from the U.S. beat the estimates.
- US Dollar Index rose to a new monthly high above 94.
Despite the subdued trading action on Tuesday, the AUD/USD was able to gather some bullish momentum and reach its highest level since December 6 at 0.7580. However, with the greenback gaining strength in the early NA session, the pair started to retrace its gains and was last seen trading at 0.7560, still up 30 pips, or 0.4%, on the day.
Earlier today, Goldman Sachs in a report said that the strong global growth would continue to boost the demand for commodities and allowed the commodity-sensitive aussie find demand. "A positive carry in key commodity markets and already strong global demand growth across the commodity complex reinforces the case for owning commodities. And hence we maintain our 12-month overweight recommendation, now with a forecasted return of almost 10 percent," Jeff Curries, the global head of Commodities, wrote.
Later in the day, the PPI data from the United States came in at 0.4% on a monthly basis in November, lifting the annual rate to its best level in nearly six years at 3.1%. The DXY, which had been moving in a tight band below the 94 mark, surged to its best level since mid-November at 94.10. At the moment, the index is at 94.08, up 0.15% on the day. The next significant catalyst for the buck will be tomorrow's FOMC meeting, at which the updated economic projections and the 'dot plot' will be released.
Technical outlook
The pair faces the immediate hurdle at 0.7580 (daily high/20-DMA) ahead of 0.7650 (50-DMA) and 0.7710 (200-DMA). On the flip side, supports could be seen at 0.7500 (psychological level), 0.7420 (Jun. 5 low) and 0.7370 (Jun. 1 low).
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