- AUD/USD is set to end the week with a gain of 1.54%.
- Volatile sentiment keeps AUD/USD oscillating in the 50-70 pip range.
- AUD/USD will remain below 0.7000 according to National Australia Bank.
rally of AUD/USD It is showing signs of losing steam but remains on an upside after posting its first day’s loss in the last five on Wednesday, although at the time of writing, it is posting a minimum gain of 0.14%. AUD/USD is trading at 0.6897 in a sensitive session.
In Thursday’s AUD/USD price action the pair opened around 0.6880, down from 0.6900. However, it rose to a daily high of 0.6916 before moving back to the 0.6850 area, reaching a daily low of 0.6858; After settling the dust, it is trading at the current level.
AUD/USD falters as sentiment swings amid volatile session
The feeling remains delicate, changing throughout the day. The ECB’s first growth in 11 years, the global economic slowdown led by China, and the US recession remain on traders’ minds, putting riskier assets on the backfoot. A reflection of this is the swing of AUD/USD in the range of 50-70 pips with no obvious bias. However, in times of recession, the dollar is king.
Meanwhile, and in line with recent news about hiring suspensions by US companies, notably Apple, Google and Ford, the US Department of Labor revealed that initial jobless claims for the week ended July 16 totaled 251,000. increased, exceeding an estimated 240,000. New high of 8 months. Claims rose as the Federal Reserve raised interest rates to curb persistent inflation. However, it is a consequence that American workers will have to deal with unless the US central bank begins to see inflation slowing.
Meanwhile, the Philadelphia Fed Manufacturing Index fell for the second straight month to -24.8 from -12.4 in June. The report said that “in general, companies continued to report growth in employment, but the employment index declined 9 points to 19.4, the lowest reading since May 2021.”
On the Australian side, Reserve Bank of Australia (RBA) Governor Philip Lowe insisted that higher rates would be needed to dampen inflation expectations, he said on Wednesday.
AUD/USD will remain below 0.7000 according to National Australia Bank
“We believe the dollar is still peaking, given the tough stance of the Federal Reserve and growing concerns about an imminent global recession,” analysts at National Australia Bank said in a note.
“Our view on a stronger dollar implies a longer period for the Australian dollar below 0.70, with the currency lying in a range of $0.65-0.70 in the coming quarters.”
AUD/USD Key Technical Level