AUD/USD Price Analysis: USD sell-off pauses after US confidence data

AUD/USD retreats below 0.6850, still poised to make a 2.40% weekly gain, its highest in 2023.
UoM US Confidence data provided some support to the USD.
DXY Index stabilised below 100.00 but remains vulnerable.

Patricio Martín FXStreet

At the end of the week, the Aussie lost some ground against the Greenback as US Treasury yields somewhat recovered, lending the USD support. However, the pair is set to see further upside as it is expected the Federal Reserve (Fed) will tilt more dovish following soft inflation data from June.

In a tough week for the USD it was reported that the Core Consumer Price Index (CPI) from the US from June, dropped to 4.8% YoY in June, while the Core Producer Price Index (PPI) slid to 2.6% YoY in the same period. As markets seem to be taking off the table another rate hike past the July meeting, US Treasury yields declined, making the USD face severe selling pressure.

On the data front, the University of Michigan (UoM) reported that its Consumer Confidence Index increased to 72.6 in July from it previous 65.5 and provided some support for the USD.

On the Aussie’s side, investors await labor market data next week, including the Employment Change and Unemployment rate figures from June to be released next Thursday. In addition, investors should keep an eye on China’s situation as it is expected that the Chinese government will announce stimulus measures to bolster the economy. Regarding the Reserve Bank of Australia (RBA), Deputy Governor Bullock was appointed as the new Governor to replace Governor Lowe and her term is set to begin in September 18.

AUD/USD Levels to watch

Despite Friday’s downside movements, the AUD/USD’s outlook is bullish for the short term. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) stand strong in positive territory while the pair trades above the 20, 100 and 200-day Simple Moving Averages.

Resistance Levels: 0.6900 (June high), 0.6950,0.6980.

Support Levels: 0.6785, 0.6750, 0.6715 (20-day Simple Moving Average).

AUD/USD Daily chart

AUD/USD

Overview
Today last price	0.6847
Today Daily Change	-0.0042
Today Daily Change %	-0.61
Today daily open	0.6889

Trends
Daily SMA20	0.6718
Daily SMA50	0.6681
Daily SMA100	0.6683
Daily SMA200	0.6701

Levels
Previous Daily High	0.6895
Previous Daily Low	0.6785
Previous Weekly High	0.6705
Previous Weekly Low	0.6599
Previous Monthly High	0.69
Previous Monthly Low	0.6484
Daily Fibonacci 38.2%	0.6853
Daily Fibonacci 61.8%	0.6827
Daily Pivot Point S1	0.6818
Daily Pivot Point S2	0.6747
Daily Pivot Point S3	0.6708
Daily Pivot Point R1	0.6927
Daily Pivot Point R2	0.6966
Daily Pivot Point R3	0.7037

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

AUD/USD climbs above 0.6950 on RBA Kent's hawkish remarks, ahead of Chinese data

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery from sub-0.6900 levels to an over three-month high amid supporting factors. RBA Assistant Governor Chris Kent's hawkish remarks boost the Australian Dollar ahead of China's macro data dump. Meanwhile, the recent fall in US bond yields keeps the US Dollar near a two-week low, touched last Friday, further boosting the pair.

USD/JPY struggles below 158.00 on hawkish BoJ, weak USD

USD/JPY meets fresh supply during the Asian session on Monday, trading above last week's swing low as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the currency pair amid BoJ Governor Kazuo Ueda's hawkish remarks. Meanwhile, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and support spot prices.

Gold eyes $4,200 as sliding bond yields keep USD depressed

Gold kicks off the new week on a positive note, awaiting a sustained move above $4,200 before the next leg up as the recent decline in US bond yields keeps the US Dollar depressed. However, Fed hike bets and geopolitical risks help the buck hold above a two-week low, touched on Friday, which might keep a lid on further upside for the non-yielding bullion.

Week ahead: Stocks seek direction as earnings take centre stage

It has been a challenging week for investors as the hotter US CPI report and the solid start to the earnings season did not produce the expected market movements. With the exception of the aussie, the US dollar is currently posting minimal gains across the FX spectrum, with its post-CPI rally proving short-lived, especially as dovish Fedspeak persists.

CFTC report: Euro and Aussie shorts build as Gold exposure remains elevated

The week in one sentence: Euro shorts deepened, and Yen longs retreated in the week to October 13. In addition, Coffee buying continued, and Gold exposure remained elevated despite another price decline. Speculators turned more bearish on the Euro (EUR), taking net shorts to around 137.6K contracts, the highest level since January 2016.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.