AUD/USD rallies at the moment of writing as the DXY drops after poor US data. The greenback has dominated the currency in the short term after the US inflation data release. Unfortunately, USD’s appreciation was only a temporary one.
The US Retail Sales increased only by 0.0% versus 0.1% expected, while the Core Retail Sales dropped by 0.8% even if the specialists expected to see a 0.5% growth. Moreover, the Industrial Production increased only by 0.7% compared to 0.9% expected, the Capacity Utilization Rate increased from 74.4% to 74.9%, below 75.0% forecast, while the Prelim UoM Consumer Sentiment dropped unexpectedly from 88.3 to 92.8.
All these poor economic data forced the US to extend its decline. The trades were prepared for this scenario, that’s why the dollar has started to drop since yesterday.
Technical Analysis!
AUD/USD increased again after registering only a false breakdown below 0.7705 and through the lower median line (lml) of the ascending pitchfork. The pair has reached a strong support area, so a throwback was expected.
Jumping and closing above the immediate highs confirmed further growth. The weekly pivot point (0.7792) is seen as a first upside target. Also, 0.7815 represents a strong upside target.
AUD/USD will continue to increase as long as DXY resumes its drop. It remains to see how the pair reacts at the pivot point and at the 50% Fibonacci line.
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