AUD/USD pares losses and returns to 0.6600 with US Dollar strength easing

The Aussie is shrugging off bearish pressure to regain lost ground.
A brighter market mood and a somewhat softer US Dollar are buoying the AUD.
AUD/USD needs to confirm above 0.6600 to set its focus at the 0.6650 key resistance area.

Guillermo Alcala FXStreet

The Australian Dollar is building up some positive momentum on Friday’s European session. The brighter sentiment, with European markets trading in a moderately positive tone, and some profit-taking after the sharp US dollar rally seen this week are pushing the Aussie higher.

The US Dollar loses steam as market sentiment improves

The US Dollar Index is practically flat on the day, capped below one-month highs for the third consecutive day. The rally on US Treasury yields has lost steam and the Dollar might need some new arguments to extend January's 2.8% rally.

Recent data from the US has been USD-supportive. Jobless claims declined against expectations last week, which endorses the view of a resilient economy and adds to evidence that the market had got ahead of itself with rate cut expectations in December.

Beyond that, data from China confirmed that the world’s second target economy is struggling. The fourth quarter’s GDP and Retail Sales came below expectations, leaving investors anxious for bolder stimulus measures, and increasing negative pressure on the China-proxy AUD.

AUD/USD Technical analysis

The Australian Dollar is correcting higher on Friday, coming up from strongly oversold levels after a 4.5% sell-off in January. The pair is now pushing against resistance at the 0.6600 area heading to a stronger resistance area, at 0.6640/50.

On the downside, a bearish reversal below 0.6520 would resume the broader bearish trend and increase pressure towards 0.6450.

Technical levels to watch

AUD/USD

Overview
Today last price	0.6596
Today Daily Change	0.0028
Today Daily Change %	0.43
Today daily open	0.6568

Trends
Daily SMA20	0.6723
Daily SMA50	0.6645
Daily SMA100	0.6518
Daily SMA200	0.6582

Levels
Previous Daily High	0.6575
Previous Daily Low	0.6526
Previous Weekly High	0.6735
Previous Weekly Low	0.6647
Previous Monthly High	0.6871
Previous Monthly Low	0.6526
Daily Fibonacci 38.2%	0.6556
Daily Fibonacci 61.8%	0.6545
Daily Pivot Point S1	0.6538
Daily Pivot Point S2	0.6508
Daily Pivot Point S3	0.6489
Daily Pivot Point R1	0.6587
Daily Pivot Point R2	0.6605
Daily Pivot Point R3	0.6636

Author

Guillermo Alcala

FXStreet

Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.

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