- Copper futures rise to support the AUD on Friday.
- Improved sentiment provides a boost to risk-sensitive currencies.
- US Dollar Index stays below 96 following housing data.
After recording modest losses in the previous two days, the AUD/USD pair reversed its direction on Friday and broke above the 0.71 handle to turn positive for the week. As of writing, the pair was trading at 0.7137, adding 0.5% on a daily basis.
Earlier today, the strong upsurge witnessed in copper prices provided a boost to the AUD and helped it disregard the disappointing GDP and industrial production data from China. After gaining more than 1% on the day, copper futures retreated slightly into London fix and was last seen up 0.8%. Additionally, the improved market sentiment as reflected by the strong rebound seen in the major equity indexes in the U.S. also allows the risk-sensitive AUD to stay resilient against its peers. At the moment, both the Dow Jones Industrial Average and the S&P 500 indexes are up around 0.7% on the day.
On the other hand, today’s data from the U.S. showed that existing home sales fell 3.4% in September as higher mortgage rates continued to hurt potential home-buyers. The US Dollar Index, which rose to its highest level in 10-days above the 96 handle, retreated slightly and was last seen down 0.12% at 95.88.
After Atlanta Fed President Raphael Bostic delivers his speech at 16:00 GMT, the trading action is likely to stay subdued toward the end of the week.
Technical levels to consider
The initial resistance for the pair aligns at 0.7150 (daily high) ahead of 0.7185 (50-DMA) and 0.7235 (Oct. 2 high). On the downside, supports could be seen at 0.7120 (20-DMA), 0.7085 (daily low) and 0.7000 (psychological level).
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