AUD/USD jumps above 0.7250 as the US dollar retreats
- DXY drops for the first time in five days, despite a decline in US stocks.
- AUD/USD rebounds sharply from monthly lows, erases weekly losses.
The AUD/USD gained momentum during the American session and jumped to 0.7255, hitting a fresh daily high boosted by a correction of the US dollar across the board.
The DXY is falling 0.20%, posting the first decline after rising during four consecutive days. The index peaked at 94.50, earlier on Thursday, the highest in a year and then pulled back to 94.15.
The greenback weakened even as US stocks are mixed and despite steady US bond yields. The US 10-year yield stands at 1.53% and the Dow Jones falls by 0.34% while the Nasdaq rises by 0.38%.
Economic data from the US showed Q2 GDP rising at 6.7% (revised from 6.6%) and initial jobless claims rising for the third consecutive week to 362K against expectations of a decline to 335K. Fed Chair Powell is speaking again at the Congress. He expects some relief on inflation during the first half of next year.
From a technical perspective, the rebound in AUD/USD so far looks like a correction but if it manages to hold above 0.7220, the bearish pressure seems alleviated. The next resistance is seen at 0.7280 and then comes the 0.7315 key level.