AUD/USD extends daily correction, looks to close below 0.7150


  • AUD/USD erases large portion of weekly gains on Friday.
  • Month-end flows help US Dollar Index gain traction.
  • Personal Spending in US increased more than expected in July.

After climbing to its highest level in nearly 18 months at 0.7228 on Friday, the AUD/USD pair staged a deep correction and was last seen trading at 0.7149, losing 0.6% on the day. Despite this drop, the pair remains on track to post weekly gains for the sixth straight week and is up 3.5% in July. 

USD gathers strength in the second half of the day

Earlier in the day, the US Bureau of Economic Analysis reported that Personal Spending in the US increased by 5.6% on a monthly basis in July. However, Personal Income declined by 1.1% during that period and didn't allow the greenback to capitalize on the data. Meanwhile, the annual core Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, arrived at 0.9%.

Although the US Dollar Index (DXY) stayed relatively quiet around 93.00 after this data, it received a boost from month-end flows toward the London fix. At the moment, the DXY is up 0.52% on a daily basis at 93.45.

Next week, the Reserve Bank of Australia will hold its monetary policy meeting and release its statement alongside the rate decision at 0430 GMT on Tuesday. Previewing this event, "the target cash rate should remain at 0.25% given the Minutes of the July meeting stated there is “no need to adjust the package of policy measures in Australia in the current environment."," TD Securities analysts said.

Technical levels to watch for

AUD/USD

Overview
Today last price 0.7149
Today Daily Change -0.0046
Today Daily Change % -0.64
Today daily open 0.7195
 
Trends
Daily SMA20 0.7041
Daily SMA50 0.6923
Daily SMA100 0.6601
Daily SMA200 0.6697
 
Levels
Previous Daily High 0.7198
Previous Daily Low 0.712
Previous Weekly High 0.7184
Previous Weekly Low 0.6972
Previous Monthly High 0.7065
Previous Monthly Low 0.6648
Daily Fibonacci 38.2% 0.7168
Daily Fibonacci 61.8% 0.715
Daily Pivot Point S1 0.7144
Daily Pivot Point S2 0.7094
Daily Pivot Point S3 0.7067
Daily Pivot Point R1 0.7222
Daily Pivot Point R2 0.7249
Daily Pivot Point R3 0.7299

 

 

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