- AUD/USD is edging lower in the American session.
- On a weekly basis, AUD/USD is up more than 100 pips.
- US Dollar Index struggles to stage a meaningful rebound.
The AUD/USD pair rose to 0.7760 earlier in the day but lost its traction during the American trading hours. As of writing, the pair was down 0.2% on a daily basis at 0.7745.
In the absence of significant fundamental drivers, the pair seems to be making a technical correction as investors may be looking to book their profits following a three-day rally.
Earlier in the day, the data published by the University of Michigan showed that the Consumer Sentiment Index improved modestly to 86.5 in April’s preliminary reading from 84.9 in March. Although this print came in weaker than the market expectation of 89.6, it failed to trigger a noticeable market reaction.
Meanwhile, the US Dollar Index is staying in a relatively right range a little above 91.50, allowing AUD/USD to limit its losses ahead of the weekend.
AUD/USD near-term outlook
UOB Group analysts think that AUD/USD could re-test 0.7785 in the next 1-3 weeks. “While conditions remain overbought and momentum is beginning to wane, there is scope for AUD to make another push higher towards 0.7785,” analysts said. “Looking ahead, the next resistance is at 0.7820. A break of 0.7670 (‘strong support’ level was at 0.7645 yesterday) would indicate that the upside risk has dissipated.”
Additional levels to watch for