- DXY drops toward daily lows boosting AUD/USD toward weekly highs.
- The Australian dollar continues to outperform, AUD/NZD back to 1.0700.
The AUD/USD gained momentum and bounced from 0.7688 to 0.7732, hitting a fresh daily high, slightly below the recent peak at 0.7741. It remains near the highs, supported by a decline of the US dollar across the board.
DXY under pressure despite positive US data
The greenback weakened after the beginning of the American session and pulled back. The US Dollar Index (DXY) is approaching the 89.50 zone after being unable to rise back above 90.00.
The ISM manufacturing report did not boost the dollar. The main index rose in December to 60.7, surprising market participants that were expecting a decline to 56.6. It was the highest reading since 2018. The subindices also came in above expectations.
Wall Street is posting mixed numbers on Tuesday. Currencies link to commodities are higher; among them, the Australian dollar is outperforming. AUD/NZD is back at the 1.0700 area after Monday’s retreat.
AUD/USD uptrend intact
The main trend favors the Australian dollar versus the greenback. After pulling back on Monday, the AUD/USD is back above 0.7700. A break of 0.7730 could lead to further gains.
The strong immediate support is seen around 0.7650. A break lower would alleviate the bullish pressure. The critical support might be seen at 0.7570, the convergence of the 20-day moving average and a short-term uptrend line. A consolidation below would open the door to a sharper bearish correction.
Technical levels
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