- Broad-based USD strength weighs on AUD/USD on Thursday.
- Upbeat data from the U.S. boost the DXY.
- Coming up: FOMC Chairman Powell speech & private sector credit growth in Australia.
The AUD/USD pair lost its traction on Thursday and eased below 0.7250 during the European trading hours as the greenback continued to gather strength following yesterday’s FOMC event. After going into a consolidation phase near 0.7230, the pair came under a renewed pressure in the NA session and fell to a fresh weekly low at 0.7209 with the macroeconomic data releases from the United States fueling the dollar’s rise. As of writing, the pair was staging a modest correction and trading 0.47% lower at 0.7223.
According to the third estimate of the U.S. Bureau of Economic Analysis, the real-GDP expanded 4.2% in the second quarter to match the previous estimate and markets’ expectation. Further details of the report revealed that core Personal Consumption Expenditures (PCE) rose to 2.1% from 2% in the same period. Additionally, following a disappointing 1.2% decline in July, durable goods orders increased by 4.5% in August to beat the experts’ forecast of 2%. On a negative note, pending home sales contracted by 1.8% on a monthly basis in August to record its fourth straight fall.
- US: Real GDP expanded at an annual rate of 4.2% in Q2 to match expectations.
- US: Durable goods orders increased by 4.5% in August following July’s 1.2% contraction.
The US Dollar Index, which rose to mid-94s earlier in the day, extended its upside to a new 10-day high at 94.85 following the data and was last seen consolidating at 94.75, where it was up 0.5% on a daily basis.
Assessing today’s data, “between Chairman Powell’s comment yesterday the that the U.S. economy is in a particularly good spot and today’s robust durable good orders and excellent business spending, despite the August pause the six months to July saw the strongest investment spending in five years, the dollar has room to run on the American economy alone,” FXStreet Senior Analyst Joseph Trevisani said.
Toward the end of the NA session, FOMC Chairman Powell will be delivering speeches. During the early trading hours of the Asian session, the Reserve Bank of Australia will publish its Priva Sector Credit report.
Technical levels to consider
The initial support for the pair aligns at 0.7200/0.7195 (psychological level/20-DMA) ahead of 0.7145 (Sep. 18 low) and 0.7085 (Sep. 11 low). On the upside, resistances could be seen at 0.7265 (50-DMA), 0.7310 (Sep. 26 high) and 0.7350 (100-DMA).
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