- US Dollar Index stages a modest recovery on Friday.
- Import prices in the U.S. rise more than expected in September.
- Wall Street starts the day with strong gains.
Following yesterday's impressive upsurge, the AUD/USD pair stayed relatively calm in a tight range above 0.71 for the majority of the day on Friday before gaining traction in the last hour. As of writing, the pair was trading at 0.7135, adding 0.15% on the day.
In the aftermath of the high volatility witnessed in the second half of the week, investors seem to have taken a backseat on Friday. The US Dollar Index, which dipped below the critical 95 handle, is now making a correction and was last seen up 0.2% on the day at 95.23. Earlier in the session, the data from the U.S. showed that the import price index rose 0.5% in September following August's 0.4% decline and surpassed the market expectation of 0.2%.
Meanwhile, in an interview with CNBC, Chicago Fed President Charles Evans argued that a slightly restrictive Fed policy, which could translate to 50 basis points above the neutral rate, would be appropriate.
Despite the modest USD strength, however, the improved market sentiment is helping risk-sensitive currencies such as the AUD on Friday. After suffering heavy losses for two straight days, major equity indexes in the U.S. started the day sharply higher. The Dow Jones Industrial Average and the S&P 500 are adding 1.5% and 1%, respectively, in the first hour of trading.
Technical levels to consider
The initial resistance for the pair could be seen at 0.7170 (20-DMA) ahead of 0.7210 (50-DMA) and 0.7270 (Sep. 27 high). On the downside, supports are located at 0.7110 (daily low), 0.7040 (Oct. 5 low), and 0.7000 (psychological level).
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.