- AUD/USD sideways around 0.7350, consolidating at 12-week highs.
- Aussie’s rally loses steam as risk appetite falters.
- The Australian dollar looks ready to break 0.7400 – UOB.
Australian dollar’s pullback from intra-ay highs at 0.7375 seen on Wednesday’s early trading has been contained at 0.7325, before bouncing up to 0.7360 area. At the moment of writing, the pair is practically unchanged on the day consolidating at its highest levels since early September.
The aussie loses steam as risk appetite falters
The risk rally witnessed earlier this week has vanished on Wednesday, which has favoured the US dollar against the risk-sensitive AUD. Market enthusiasm about the positive news about AstraZeneca’s COVID-19 vaccine and Janet Yellen’s nomination as the next treasury secretary seems to have ebbed with the investors shifting their focus towards the deteriorating macroeconomic data.
US Weekly Jobless Claims increased to 778,000 in the week of November 20, well above the 730.000 reading expected by the market. This is the second consecutive increase in unemployment applications, something that did not occur since July, which reveals that the coronavirus infections and lockdowns are started to bite into the labour market.
Furthermore, the second estimate of Q3 US GDP has remained unchanged, at 33.1%, slightly below the 33.2% expected by the market. On the other hand, US Durable Goods’ Orders increased 1.3% in October, beating expectations of a 0.9% rise.
AUD/USD looks ready to break 07400 – UOB
From a technical point of view, the FX Analysis Team at UOB maintains the positive outlook on the pair, aiming to levels beyond 0.7400: “Despite the relatively choppy price actions, upward momentum appears to be strong and AUD is expected to move higher even though the year-to-date high at 0.7413 is likely out of reach (there is a minor resistance at 0.7400). On the downside, a breach of 0.7320 would indicate the current upward pressure has eased (minor support is at 0.7340).”
Credit: FX Street