- Disappointing data weighs on the greenback on Friday.
- US Dollar Index touches fresh daily low below mid-94s.
- AUD/USD remains on track to record weekly losses.
After failing to break above the 0.74 mark earlier today, the AUD/USD pair corrected its upside and dropped to 0.7370 before gathering momentum again in the NA session. As of writing, the pair was trading at 0.7392, up 0.5% on the day.
The pair’s price action on Friday seems to be dominated by the USD’s market valuation. The US Dollar Index, which fell to mid-94s in the European morning, came under a renewed bearish pressure following the macroeconomic data releases from the United States.
Although today’s data showed that the core-PCE price index advanced to 2% on a yearly basis in May, personal spending growth came in at 0.2% to miss the market expectation of 0.4%. Moreover, the UoM’s Consumer Sentiment Index retreated to 98.2 in June in its final reading amid rising concerns over the Trump administration’s trade policy. On a positive, the Chicago PMI rose to its best level in six months at 64.1 but failed to help the greenback recover its losses. At the moment, the DXY is down nearly 0.7% on the day at 94.36.
Technical outlook
With today’s upsurge, the RSI indicator on the daily chart edged higher toward the 50 mark, suggesting that sellers are losing control of the price action. On the upside, the initial resistance for the pair aligns at 0.7400 (daily high/psychological level) ahead of 0.7460 (20-DMA) and 0.7500/10 (psychological level/50-DMA). Supports align at 0.7320 (Jun. 27 low), 0.7300 (psychological level) and 0.7225 (Dec. 21, 2016, low).
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