- AUD/USD looks to record daily losses for the third straight day.
- US Dollar Index inches higher toward the critical 95 mark.
- Trade deficit shrinks more than expected in the U.S.
Earlier today, the AUD/USD pair rose above the 0.74 mark before losing its traction and coming under a heavy selling pressure in the second half of the day. As of writing, the pair was trading at 0.7352, losing 0.55% on the day.
A stronger greenback is the primary driver of the pair’s price action on Wednesday. The US Dollar Index, which briefly dipped below the 94 mark earlier this week, rose sharply today on the back of upbeat data from the United States and easing concerns over the trade conflict between the United States and the rest of the world further escalating.
The data released by the U.S. Bureau of Economic Analysis showed that the international trade deficit decreased to $64.8 billion in May to better the experts’ estimate of $68.9 billion. Moreover, durable goods orders contracted by less than expected.
Earlier today, senior administration officials claimed that President Trump wouldn’t invoke a national emergency law on China. However, White House economic advisor Larry Kudlow later said that Trump was not planning to retreat on China and forced major equity indexes to retrace their early gains. Nonetheless, the US Dollar Index hasn’t shown a negative reaction and is now within a touching distance of the 95 mark, up 0.6% on the day.
Technical levels to consider
The pair could encounter the immediate support at 0.7340 (Jun. 21 low) ahead of 0.7300 (psychological level) and 0.7225 (Dec. 21, 2016, low). On the upside, resistances are located at 0.7440 (Jun. 24 high), 0.7500 (psychological level) and 0.7570 (Jun. 1 high).
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