AUD/USD extends daily rebound to 0.7630 area, looks to close week in red

• AUD/USD continues to push higher during the American session.
• US Dollar Index edges lower as market mood improves.
• Upbeat market mood makes it difficult for USD to find demand.

The AUD/USD pair preserved its bullish momentum during the American trading hours and reached a daily high of 0.7638. As of writing, the pair was up 0.65% on the day at 0.7628. Despite Friday’s rebound, AUD/USD remains on track to end the week in the negative territory.

Renewed USD weakness in the second half of the day allowed AUD/USD to push higher. With Wall Street’s main indexes opening the last day of the week higher, the US Dollar Index (DXY) turned south and dropped to a daily low of 92.64. Currently, the S&P 500 Index is up 0.67% on the day at 3,935 and the DXY is losing 0.15% at 92.70.

The data from the US showed that Personal Income and Personal Spending in February declined by 7.1% and 1%, respectively. Additionally, the US Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index  edged  lower to 1.4% on a yearly basis from 1.5% in January.

Finally, the University of Michigan’s Consumer Sentiment Index rose to its highest level in a year at 84.9 in March’s final reading. Nevertheless, investors showed little to no reaction to these figures.

AUD/USD technical outlook

UOB Group analysts think that AUD/USD’s bearish outlook  remains intact as long as the pair does not move above 0.7680.  

“While there is no change in our view for now, oversold shorter-term conditions could lead to a couple of days of consolidation first,” analysts further noted. “Looking ahead, a break of 0.7560 (note that AUD dropped to 0.7564 during NY hours) would shift the focus to 0.7510.”

Additional levels to watch for