- AUD/USD breaks above 0.7400 for the first time in a month.
- Risk-on market sentiment turn investors towards riskier assets boosts the AUD.
- US Initial Jobless Claims dropped below the 300K mark.
The Australian dollar climbs 0.58% is trading at 0.7423 during the New York session at the time of writing. The market sentiment is upbeat, portrayed by European and US equity indexes in the green. Positive US macroeconomic data concerning the labor market and prices paid for US producers boost the investors’ risk appetite.
DXY breaks below 94.00, underpinned by falling US T-bond yields
The US Dollar Index that measures the greenback’s performance against a basket of six rivals is sliding 0.03%, at 93.99, while the US T-bond 10-year yield struggles to hold to previous day levels, sits at 1.526%, down almost two and a half basis points.
Data-wise, the Australian economic docket featured the employment report, which showed that the economy droped worse-than-expected 138K jobs in September, while the Unemployment Rate rose to 4.6%.
On the US front, the US Initial Jobless Claims came at 293K better than the 319K foreseen by analysts, delivering positive news regarding the labor market while increasing the chances of the Federal Reserve reduction to the pace of the Quantitative Easing. Further, the US Producer Price Index rose by 8.6% less than the 8.7% estimated, while excluding food and energy, expanded 6.8% lower than the 7.1% expected.
That said, positive news during the day benefited risk-sensitive currencies, like the Aussie, which reclaimed the 0.7400 thresholds. However, seesawing market sentiment due to changing economic conditions could put a lid on the AUD/USD.
AUD/USD Price Forecast: Technical outlook
Daily chart
The AUD/USD is trading above the 100-daily moving average (DMA) at 0.7416, whereas the 200-DMA is above the spot price, indicating the major trend is tilted to the downside. However, momentum indicators with the Relative Strength Index (RSI) at 64, pointing higher, suggests that the near-term trend is tilted to the upside.
For AUD/USD buyers to resume the upward trend, they need a daily close above the 100-DMA. In that outcome, the first resistance would be the September 3 high at 0.7478. A breach of the latter could expose crucial support levels, the July 6 at 0.7599 and then the psychological 0.7700.
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 stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.