AUD/USD loses bullish momentum, retreats below 0.7380
- AUD/USD lost its traction after rising above 0.7200 on Friday.
- Market mood turns cautious ahead of the weekend.
- US Dollar Index turns flat on the day near 92.50.
The AUD/USD pair climbed to a daily high of 0.7410 on Friday but lost its traction during the American session. As of writing, the pair was still up 0.13% on the day at 0.7375.
The negative shift witnessed in market sentiment seems to be making it difficult for the pair to preserve its bullish momentum ahead of the weekend. The S&P 500 Index, which opened in the positive territory, is currently losing 0.2% on the day at 4,484.
On the other hand, the US Dollar Index (DXY) is also staging a rebound from the daily low it touched at 92.33. At the moment, the DXY is virtually unchanged on the day at 92.49.
The data from the US revealed on Friday that the annual Producer Price Index (PPI) advanced to a new series-high of 8.3% in August from 7.8% in July. Meanwhile, Cleveland Federal Reserve Bank President Loretta Mester said that she would still like to begin tapering asset purchases some time this year despite the weak August jobs report.
AUD/USD outlook
According to FX Strategists at UOB Group, AUD/USD could retreat to 0.7320 in the near term.
"AUD is likely to consolidate and trade within a 0.7320/0.7460 range," analysts said. "Looking ahead, only a daily closing below 0.7320 would indicate the start of a deeper pullback. At this stage, the prospect for AUD to below 0.7320 is not high.”
AUD/USD risks a deeper pullback below 0.7320 – UOB.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
