- AUD / USD is moving sideways around 0.7350, consolidating at 12-week highs.
- The Aussie rally loses steam as risk appetite wanes.
- The Australian dollar looks set to break 0.7400 – UOB.
The Australian dollar’s pullback from intraday highs of 0.7375 seen in early trading on Wednesday has been contained at 0.7325, before rebounding to the 0.7360 area. As of this writing, the pair is largely unchanged on the day, consolidating at its highest levels since early September.
Australian dollar loses steam amid lack of risk appetite
The risk rally seen earlier this week faded on Wednesday, favoring the US dollar against the risk-sensitive AUD. Market enthusiasm for the positive news about AstraZeneca’s COVID-19 vaccine and Janet Yellen’s nomination as the next Treasury secretary appears to have waned with investors shifting their focus to deteriorating macroeconomic data.
Weekly jobless claims in the United States rose to 778,000 in the week of November 20, well above the market reading of 730,000 expected. This is the second consecutive spike in jobless claims, something that hasn’t happened since July, revealing that coronavirus infections and lockdowns are beginning to bite the job market.
Furthermore, the second estimate of US GDP for the third quarter has remained unchanged at 33.1%, slightly below the 33.3% expected by the market. On the other hand, US durable goods orders increased 1.3% in October, beating expectations for a 0.9% increase.
AUD / USD looks set to break 0.7400 – UOB
From a technical point of view, the UOB currency analysis team maintains the positive outlook on the pair, targeting levels beyond 0.7400: “Despite the relatively choppy price actions, the bullish momentum appears to be strong and expect the AUD to rise even though the year-to-date high at 0.7413 is likely to be out of reach (there is a minor resistance at 0.7400). On the downside, a breakout of 0.7320 would indicate that the current bullish pressure has eased (minor support is at 0.7340) ”.
Technical levels
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