- AUD/USD stays under modest bearish pressure on Wednesday.
- US Dollar Index edges higher following Tuesday's correction.
- Focus shifts to December CPI data from US.
After closing in the positive territory on Tuesday, the AUD/USD pair lost its traction and dropped to a fresh daily low of 0.7735 ahead of the American session on Wednesday. As of writing, the pair was down 0.35% at 0.7744.
DXY rebounds ahead of inflation report
The renewed USD strength on Wednesday is forcing AUD/USD to continue to push lower. The US Dollar Index (DXY) lost 0.4% on Tuesday after a bond auction in the US caused the yields to fall sharply in the late American session. With the market mood remaining cautious, the greenback started to recover the losses it suffered against its major rivals and the DXY was last seen gaining 0.2% at 90.27.
Later in the session, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for December. Analysts expect the Core CPI, which strips volatile food and energy prices, to remain unchanged at 1.6% on a yearly basis.
During the Asian trading hours on Thursday, Trade Balance data from China will be looked upon for fresh catalysts.
According to UOB Group analysts, AUD/USD needs to make a daily close above 0.7820 in order to stage a sustained advance toward the next resistance at 0.7860. "At this stage, the prospect for AUD to move clearly above 0.7820 is not high but it would remain intact as long as AUD does not move below 0.7680 (‘strong support’ level),” analysts added.
Technical levels to watch for
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.
Latest Forex News
Editors’ Picks
EUR/USD hits fresh one-month low amid souring market mood
EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points.
GBP/USD retreats toward 1.36 amid fresh dollar strength
GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown.
Gold extends sideways grind near $1,850
The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.
Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed
Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative.
DXY breaks above key downtrend, eyes move above 91.00
USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.