- DXY edges higher toward 94 in the last session of the week.
- AUD/USD fails to break above the 0.77 mark.
- The pair is still up more than 150 pips on the week.
After refreshing its highest level since November 10 at 0.7694, the AUD/USD pair lost its momentum and started to retrace its gains in the NA session. As of writing the pair was trading at 0.7643, down 0.3% on the day.
Aussie outperforms its rivals
Despite today's fall, the pair is looking to record its biggest weekly gain in more than four months. The robust gains witnessed in copper prices and a stronger-than-expected employment growth in Australia were the primary catalysts behind the aussie's strength this week.
- Yield spreads to chip away at AUD/USD but commodities more supportive – Westpac
On the other hand, the US Dollar Index, which advanced to a new multi-week high at 94.21 earlier in the week, failed to extend its gains and fell sharply on Wednesday after the FOMC disappointed the markets by not delivering a hawkish message as investors hoped. After falling all the way to 93.28 on Thursday, the DXY finally gained some traction on Friday and is now looking to close the week virtually flat near the 93.90 mark.
With the Fed meeting out of the way, markets are now focusing on the tax bill. The latest headlines suggest that Republicans are moving closer to legalizing their highly-anticipated tax reform. Republican Senator Marco Rubio, who voiced his opposition to the bill on Thursday, is going to vote 'yes' following changes to child tax credits according to a couple of news outlets from the United States. The greenback could receive some extra boost in coming days if Republicans continue to push hard to get the bill before President Donald Trump before the end of the year.
Technical levels to consider
The first hurdle for the pair aligns at 0.7710 (200-DMA) ahead of 0.7780 (100-DMA) and 0.7835 (Oct. 23 high). On the downside, supports could be seen at 0.7630 (50-DMA), 0.7585 (20-DMA) and 0.7500 (psychological level). The RSI indicator on the daily chart turned south towards the 50 mark recently, suggesting that the bullish pressure is fading away.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.