- AUD / USD clings to daily gains in the American session.
- The major Wall Street indices are up before the weekend.
- The US Dollar Index remains bearish, down around 91.00 after the PMI data.
The pair AUD/USD it experienced a decisive rally after Thursday’s slide and hit a fresh daily high of 0.7747 during US trading hours on Friday. At time of writing, the pair was up 0.48% on the day at 0.7742. Despite Friday’s recovery, AUD / USD is still on track to close the week sideways.
Earlier in the day, the widespread selling pressure surrounding the dollar helped the AUD / USD gain traction. With the major Wall Street indices rising after the opening bell, the USD struggled to find demand and the US Dollar Index (DXY) fell below 91.00.
Data released by IHS Markit on Friday showed that economic activity in the US private sector continued to expand at an unprecedented rate with the composite PMI hitting a series high of 62.2 in April. Additionally, the services PMI and manufacturing PMI stood at 60.6 and 63.1, respectively, both beating analysts’ estimates.
However, the underlying details of the PMI report revealed that input prices continued to rise sharply and producers began to pass on those increases to their customers, rekindling concerns about high inflation. The 10-year US Treasury yield turned into positive territory and helped DXY limit its losses.
AUD / USD short-term outlook
Analysts at Credit Suisse believe that AUD / USD could push lower with a sustained move below the 0.7700 / 0.7690 support area and the next target of 0.7680 / 0.7674.
“Below here a move back to 0.7588 / 86 would open, then to the 0.7532 low. The removal of that level would decisively reaffirm the issue of a wider top and end the new wider range,” the analysts added. “Only above 0.7839 / 49 would resolve the range to the upside and instead confirm a resumption of the broader uptrend, suggesting a quick move to 0.7900 / 05 and then to the 2021 high at 0.8000 / 07.”
Additional levels
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