AUD/USD finds resistance ahead of 0.73 as DXY recovers above 95.50

• Upbeat data from China helps the AUD gather strength today.
• US Dollar Index continues to recover Wednesday’s losses.
• New home sales in the U.S. surprise to the upside.

After taking advantage of the broad-based USD weakness and making a decisive break above the 0.72 handle on Wednesday, the AUD/USD pair continued to climb and touched its highest level since early December at 0.7296. As of writing, the pair was trading at 0.7283, adding 0.47% on the day.

According to the monthly report published by  China’s Federation of Logistics and Purchasing (CFLP), the business activity in the non-manufacturing sector expanded at a more robust pace than expected in January with the headline PMI improving to 54.7 vs the market expectation of 53.9. Furthermore, the Manufacturing PMI also came in slightly above the analysts’ estimate to ease concerns over the economic slowdown in China and help the AUD outperform its rivals.

Additionally, the greenback stayed under pressure during the first half of the day on Thursday as investors continued to price the dovish shift in the FOMC’s policy outlook. However, with month end flows helping the greenback gain traction, the US Dollar Index erased its daily losses and was last up 0.13% on the day at 95.53. Meanwhile, the U.S. Census Bureau reported that new home sales in November increased by 16.9% to provide an additional boost to the buck.

In the early trading hours of the Asian session, the AiG’s Performance of Manufacturing Index from Australia will be looked upon for fresh impetus.

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