- Australian dollar appreciates to re-test recent highs at 0.7315/20 area.
- The US dollar loses ground with all eyes on US labor data.
- AUD/USD remains biased lower while below 0.7370.
The Australian dollar is outperforming the rest of the major currencies on Thursday, appreciating beyond 0.6% against a somewhat weaker US dollar. The Aussie has extended its rebound from Wednesday’s lows at 0.7225 to test the top of the last three week’s trading range, at 0.7315/20 area.
The US dollar falters with US labour data on focus
The AUD has been favored by a certain US dollar weakness and a moderate appetite for risk to regain lost ground. The greenback is pulling back against its main rivals with investors reluctant to place large USD bets ahead of the release of September’s US Non-Farm Payrolls report.
With all eyes on the timing of the Federal Reserve’s next move, the market has assumed that a strong payrolls report on Friday will prompt the Bank to announce the kickstart of QE tapering in November.
Furthermore, the market mood has improved noticeably, which has reflected in higher equity markets. Wall Street is posting gains beyond 1% as investors’ concerns about the potential consequences of surging inflation levels have eased with oil prices pulled back from seven-year highs while fears of a government shutdown in the US seem to have taken the backseat for now.
AUD/USD remains negative while below 0.7370 – Commerzbank
In a broader context, Karen Jones, Head of FICC Technical Analysis at Commerzbank, however, sees the pair biased lower while below 0.7370: “AUD/USD near term strength is viewed as corrective. The market recently failed at the 4-month downtrend at .7370 and we will retain a negative bias while capped here. Initial resistance is the .7313 55-day ma.”
Technical levels to watch
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 struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. The holiday mood kicked in, keeping action limited across the FX board, while a cautious risk mood helped the US Dollar hold its ground and forced the pair to stretch lower.
GBP/USD set to swoon on holiday-shortened week
GBP/USD waffled near the 1.2550 level on Monday, kicking off the holiday trading week with a third of a percent decline as market sentiment coils. Market volumes are set to drain out of global exchanges as investors broadly hang up their hats for the Christmas holiday, and global markets will be shuttered on Wednesday.
Gold flat lines above $2,600 ahead of holiday trading week
Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday.
Ethereum risks a decline to $3,000 as investors realize increased profits and losses
Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.