- AUD/USD consolidates gains below 0.7400 in a thin market session.
- US FOMC minutes hurt demand for USD.
- Westpac’s analysts see the Aussie breaking past 0.7400 next week.
The Australian dollar has been practically flat at 0.7365 area on a quiet session with the US celebrating Thanksgiving day. The pair consolidates gains near three-month highs with upside attempts capped below 0.7375.
US dollar weakened after the release of the FOMC minutes
Greenback demand was hurt on Wednesday following the release of the Federal Reserve last meeting’s minutes, with the bank hinting at further monetary stimulus actions on December’s meeting to support recovery from the economic impact of the COVID-19 pandemic.
The US dollar dropped to a fresh 12-week low against a basket of the most traded currencies shortly after the release, before picking up over Thursday’s European and US trading sessions.
The Australian dollar, however, has failed to capitalize on USD’s weakness and has remained practically unchanged within a tight range between 0.7350 and the mentioned 0.7375.
AUD/USD set to break beyond 0.7414 next week – Westpac
From a wider perspective, the FX Analysis Team at Westpac expects the pair to resume its uptrend next week: “Commodities continue to lend support, with our daily measure of Australia’s commodity export prices edging up to 7-year highs, with iron ore above $125/tonne (…) A somewhat fragile USD in the week ahead should help AUD/USD take out 0.7414 resistance, with dips perhaps limited to the mid-0.72 area. Our year-end target remains 0.7500.”
Technical levels to watch
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