AUD/USD trades with modest losses below 0.7200 ahead of US data

AUD/USD staged a correction after climbing above 0.7200.
US Dollar Index stays below 93.00 on Friday.
Personal Spending and Personal Income data will be released from US.

Eren Sengezer FXStreet

The AUD/USD pair extended its rally during the Asian session on Friday and touched its best level in nearly 18 months at 0.7228 boosted by the heavy selling pressure surrounding the greenback. With the trading action turning subdued during the European trading hours, the pair staged a correction and was last seen trading at 0.7190, where it was virtually unchanged on a daily basis.

USD struggles to find demand

After the US Bureau of Economic Analysis (BEA) reported on Thursday that the US economy shrunk by 32.9% on a yearly basis in the second quarter, the US Treasury bond yields fell sharply to weigh on the USD. The US Dollar Index (DXY) lost 0.3% on Thursday and slumped to its lowest level in more than two years at 92.55 on Friday. As of writing, the DXY was down 0.1% on the day at 92.87.

Meanwhile, the data published by the Australian Bureau of Statistics revealed that the Private Sector Credit declined by 0.2% on a monthly basis in June and the annual Producer Price Index (PPI) slumped to -0.4% in the second quarter. Nevertheless, these data had little to no action on the AUD/USD's movements.

In the second half of the day, Personal Income and Personal Spending data will be featured in the US economic docket. Additionally, the BEA will release the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred gauge of inflation, figures.

Previewing Friday's data from the US, “markets have priced in an extreme drop in American GDP in the second quarter," said FXStreet analyst Joseph Trevisani. "Though these spending and income figures will be released on Friday after the GDP numbers they may be at odds with the expected economic activity in the COVID quarter.”

Technical levels to watch for

AUD/USD

Overview
Today last price	0.7189
Today Daily Change	-0.0006
Today Daily Change %	-0.08
Today daily open	0.7195

Trends
Daily SMA20	0.7041
Daily SMA50	0.6923
Daily SMA100	0.6601
Daily SMA200	0.6697

Levels
Previous Daily High	0.7198
Previous Daily Low	0.712
Previous Weekly High	0.7184
Previous Weekly Low	0.6972
Previous Monthly High	0.7065
Previous Monthly Low	0.6648
Daily Fibonacci 38.2%	0.7168
Daily Fibonacci 61.8%	0.715
Daily Pivot Point S1	0.7144
Daily Pivot Point S2	0.7094
Daily Pivot Point S3	0.7067
Daily Pivot Point R1	0.7222
Daily Pivot Point R2	0.7249
Daily Pivot Point R3	0.7299

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.

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.