AUD/USD recaptures 0.7200 amid a risk-off market mood

AUD/USD edges higher despite dismal market sentiment.
Quarter-end flows, portfolio reshuffling, and US political uncertainties dampen the market sentiment.
The US Dollar Index struggles to hold to Wednesday’s gains.

Christian Borjon Valencia FXStreet

The AUD/USD is recovering from Wednesday’s losses trading at 0.7221, advancing 0.66% in the day at the time of writing. Quarter and month-end flows, portfolio reshuffling, and US political uncertainties related to the debt ceiling and the spending bill dampened the market sentiment.

The US Dollar Index is steady

Major US stocks are recording losses, except for the technologic Nasdaq Composite, which is up barely up 0.03%. Meanwhile, the US Dollar Index, which tracks the greenback’s performance against six currencies, is steady at 94.33, barely down 0.03%.

During the Asian session, good Australian economic data hit the wires. Building permits rose 6.8% for August on a monthly basis, while Private Sector Credit expanded 0.6% MoM. Additionally, coronavirus woes fade as the New South Wales Premier announced that it will ease restrictions on vaccinated people, lifting the Australian dollar spirits.

Across the pond, the US Initial Jobless Claims for the week ending on September 24 increased by 362K, 27K more than expected. Further, the 4-week moving average rose to 340K from 335.75K.

The US Bureau of Economic Analysis (BEA) released that the US economy in the third quarter increased by 6.7%, more than the 6.6% expected.

On Friday, the Australian economic docket will feature the Home Loans and Investment Lending for Homes, both reports related to August figures. On the US front, Personal Consumption Expenditures and Personal Income for August will be revealed at 12:30GMT.

Later, the Markit and ISM Manufacturing PMI’s could provide clues regarding production. Further, the UoM Consumer Sentiment will be disclosed.

AUD/USD Price Forecast: Technical outlook

Daily chart

The AUD/USD is trading well below the daily moving averages, confirming the downtrend. Price action for the day has been tilted to the upside; however, a daily close above 0.7240 could ease downward pressure. In case of that outcome, the buyers would need to push the pair at least to the 50-day moving average (DMA) at 0.7313 to regain control.

On the flip side, to resume the downtrend, sellers will need a daily close below 0.7200. In a break of the latter, the first support would be the September 29 low at 0.7169, followed by the 2021 low at 0.7105.

The Relative Strength Index is at 42, slightly up, suggesting that exhaustion to the downside is easing, opening the door for another leg-down.

ADDITIONAL LEVELS TO WATCH

AUD/USD

Overview
Today last price	0.7221
Today Daily Change	0.0047
Today Daily Change %	0.66
Today daily open	0.7174

Trends
Daily SMA20	0.7318
Daily SMA50	0.732
Daily SMA100	0.7465
Daily SMA200	0.7592

Levels
Previous Daily High	0.7265
Previous Daily Low	0.717
Previous Weekly High	0.7317
Previous Weekly Low	0.7219
Previous Monthly High	0.7427
Previous Monthly Low	0.7106
Daily Fibonacci 38.2%	0.7206
Daily Fibonacci 61.8%	0.7229
Daily Pivot Point S1	0.7141
Daily Pivot Point S2	0.7107
Daily Pivot Point S3	0.7045
Daily Pivot Point R1	0.7236
Daily Pivot Point R2	0.7298
Daily Pivot Point R3	0.7332

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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