- AUD/USD jumps in sync with risk appetite, S&P 500 futures climb 1%.
- Upbeat mood weighs on USD’s haven demand while Omicron risks loom.
- Australian Q3 GDP beat helps the aussie recover lost ground ahead of US data.
AUD/USD is flirting with three-day highs near 0.7170, as the buying pressure around the Australian dollar remains unabated amid a rebound in risk appetite.
Market optimism set in this Wednesday after the Asian regional manufacturing data came in stronger and investors cheered Fed Chair Jerome Powell’s hints aimed at curbing inflation.
Powell said that tapering of the asset purchases could be quickened and the same could be discussed in the upcoming meeting.
Further, no bad news about the Omicron covid variant also helped calm the risk sentiment. The high beta currencies such as the aussie dollar benefit from the improved risk tone while the safe-haven US dollar struggles despite the recent strength in the Treasury yields.
The aussie also takes advantage of the upbeat Australian Q3 GDP report to extend its recovery from yearly lows of 0.7063 reached on Tuesday. The Australian economy contracted 1.9% QOQ in Q3 vs. -2.7% expected and 0.7% previous.
Traders ignored the contraction in the Chinese Caixin Manufacturing PMI data, as the risk recovery overshadowed and underpinned the sentiment around the major.
Looking ahead, the aussie bulls will await the US ADP jobs and ISM Manufacturing PMI to build on the recent upside. Powell’s testimony before the House Financial Services will also hog some limelight.
AUD/USD: Technical levels
“From a technical perspective, any subsequent move up is likely to confront stiff resistance and attract fresh selling near the 0.7200 round figure. This should cap the upside near the 0.7220 region. On the flip side, weakness back below the 0.7140 area now seems to find some support near the 0.7125-15 region,” FXStreet’s Analyst Haresh Menghani notes.
AUD/USD: Additional levels to consider
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.