- AUD/USD pierces through 0.73, highest since December 2018.
- US dollar weakness and rally in S&P 500 futures underpin.
- Focus shifts back to US data after Powell’s new policy strategy.
The AUD/USD pair extends its five-day winning streak into the European session, hitting the highest levels since December 2018 at 0.7313. The spot remains on track to book a huge weekly gain.
Following a brief phase of consolidation overnight, the major extended its steady rise and surpassed the highs of 0.7290, reached after the US Federal Reserve (Fed) Chairman Jerome Powell’s Jackson Hole speech.
The advance is the pair is mainly driven by the broad-based US dollar weakness. The greenback faces a double-whammy from Fed Powell’s adoption of the average inflation targeting framework on one hand.
Meanwhile, the greenback also felt the heat of a sharp sell-off in USD/JPY amid pollical uncertainty in Japan after Prime Minister Shinzo Abe was reported to step down. The US dollar index drops 0.36% to 92.66, at the moment.
The pause in the US Treasury yields rally amid renewed risk-aversion also benefited the spot, boosting the attractiveness of the aussie dollar as an alternative higher-yielding asset. Further, the gains in the S&P 500 futures also lend support to the upside in AUD/USD.
Amid the upbeat momentum, the aussie paid little heed to the reports that China halted the Australian beef imports due to a banned substance. Also, US President Donald Trump’s promise to end reliance on China 'once and for all', in his acceptance speech to 2020 Republican National Convention, failed to deter the AUD bulls. Trump also said that he would impose tariffs on companies that leave the US.
Next of relevance remains the US Core PCE Price Index and Consumer Sentiment data for the aussie traders, as the dust settles over the Powell aftermath.
AUD/USD Technical levels
The bulls now look to the daily classic R2 at 0.7329 en route the psychological barrier of 0.7350. To the downside, the daily pivot at 0.7255 could be tested. A break below the latter could bring the 5-DMA support at 0.7230 in play.
AUD/USD Additional levels
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 holds gains above 1.0700, as key US data loom
EUR/USD holds gains above 1.0700 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
GBP/USD extends recovery above 1.2500, awaits US GDP data
GBP/USD is catching a fresh bid wave, rising above 1.2500 in European trading on Thursday. The US Dollar resumes its corrective downside, as traders resort to repositioning ahead of the high-impact US advance GDP data for the first quarter.
Gold price edges higher amid weaker USD and softer risk tone, focus remains on US GDP
Gold price (XAU/USD) attracts some dip-buying in the vicinity of the $2,300 mark on Thursday and for now, seems to have snapped a three-day losing streak, though the upside potential seems limited.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.