AUD/USD on a corrective slide towards 0.7850, awaits US data
|- Offered just ahead of 0.79 handle.
- Fails to benefit from broad USD weakness.
- Focus shifts to the US CPI, retail sales.
AUD/USD accelerates its declines in the European session, with the bears now looking to test the key confluence zone of 5 and 10-DMA located just ahead of the midpoint of the 0.78 handle.
AUD/USD drops on profit-taking
The Aussie remains strongly offered so far this Friday, unable to benefit from better Chinese trade data while broad-based US dollar weakness combined with higher gold and copper prices also failed to offer any support to the prices.
The renewed weakness seen in the spot is mainly driven by a bout of profit-taking after the rates reached fresh four-month tops just ahead of the 0.79 handle. Further, resurgent demand seen around Treasury yields also dampened the sentiment, as the AUD is usually seen as an alternative higher-yielding asset.
Markets now look forward to the US CPI and retail sales data for fresh trading impetus, as investors gear up for the Chinese data dump slated for release next week.
AUD/USD Preferred Strategy
FXStreet’s Chief Analyst, Valeria Bednarik, noted: “The short-term technical picture is bullish, as the pair holds above a modestly bullish 20 SMA, while technical indicators have advanced to fresh one-week highs, maintaining their bullish slopes. The immediate resistance is the mentioned October high of 0.7896, with large spots suspected above it that once triggered will only fuel the dominant bullish trend. Support levels: 0.7830 0.7800 0.7770. Resistance levels: 0.7895 0.7920 0.7945.”
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