- US Dollar Index comes within a touching distance of 97.
- Upbeat retail sales and nonfarm productivity figures boost the USD.
- Copper futures extend losses.
After plummeting to its lowest level since January of 2017 at 0.7203 in the early trading hours of the European session, the AUD/USD pair staged a modest recovery toward the 0.7230 handle but failed to stay there as the greenback met another bullish wave following the upbeat macroeconomic data releases from the United States. At the moment, the pair is down 0.3% on the day at 0.7215.
The monthly report released by the U.S. Census Bureau on Wednesday showed that the U.S. retail and food services sales for July 2018 rose by 0.5% to $507.5 billion to surpass the analysts’ estimate of a 0.1% growth. Furthermore, NY Fed’s Empire State Manufacturing Index improved to 25.6 in August from 22.6 in July while the nonfarm productivity rose 2.9% in the second quarter. The initial reaction to these numbers lifted the US Dollar Index to its highest level in nearly 14 months at 96.98.
However, a less-than-expected expansion in the industrial production capped the DXY’s gains and the index was last seen up 0.2% on the day at 96.85.
On the other hand, commodities continue to suffer amid a weak market sentiment and a stronger greenback. At the moment, copper futures are trading at their lowest level of the year with a 4% daily loss, making it difficult for the commodity-sensitive aussie to find demand.
Technical outlook
Supports for the pair could be seen at 0.7200 (psychological level/daily low), 0.7160 (Dec. 23, 2016, low) and 0.7100 (psychological level). On the upside, resistances are located at 0.7300 (psychological level/Aug. 12 high), 0.7365 (20-DMA) and 0.7450 (Aug. 9 high).
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