- AUD/USD extends recovery gains on Friday.
- US Dollar stays in the negative territory near 96.30.
After easing down to 0.7255 in the European morning, the AUD/USD pair took advantage of the broad-based greenback weakness and reversed its course. As of writing, the pair was trading at 0.7288, adding 0.35% on the day. Since testing the 0.72 handle on Wednesday, the pair preserved its bullish momentum and retraced its losses from the first half of the week.
Earlier today, speaking at a conference, the Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis argued that based on what they have been seeing in developed economies, Australian wage growth could be slower to respond to a tightening labor market than initially anticipated. Although these remarks seemingly put some weight on the AUD’s shoulders, the fact that the greenback struggled to find demand on Friday helped the pair gain traction. Furthermore, the CNY retraced its daily losses against the buck during the European trading hours to provide an additional boost to the AUD.
On the other hand, after closing the previous day modestly lower, the US Dollar Index’s corrective slide continued on Friday and the index was last seen at 96.29, where it was down 0.32% on the day. In the remainder of the session, the greenback’s market valuation is likely to drive the pair’s price action.
Technical outlook
On the upside, resistances could be seen at 0.7300 (psychological level/Aug. 12 high), 0.7360 (20-DMA) and 0.7450 (Aug. 9 high).Supports are located at 0.7200 (psychological level/Aug. 15 low), 0.7160 (Dec. 23, 2016, low) and 0.7100 (psychological level).
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