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.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.