AUD/USD treads water around 0.7870 as volume thins out amid a lack of catalysts

The AUD/USD pair reached a fresh 3-day high at 0.7884 during the first half of the NA session on Thursday and went into a consolidation phase. The pair, which has been moving sideways in a 10-pip range in the last couple of hours, is now trading at 0.7868, gaining 0.33% on the day.

Today, the greenback weakness seems to be the primary reason behind the pair's upsurge. Despite strong macroeconomic data releases from the U.S., the US Dollar Index is looking to close the second day in a row lower as by the poor performance of the US T-bond yields weighs. At the moment, the 10-year reference is down 1% while the DXY is dropping 0.25% at 93.07.

• US: Weekly initial claims was 222,000, a decrease of 22,000 from previous week
• Philly Fed: Manufacturing firms reported continued growth in October

On the other hand, the aussie seems to be taking advantage of the broad-based selling pressure seen on its primary rival, the kiwi. The NZD took a heavy hit from the political turmoil in New Zealand, boosting the AUD/NZD pair to its highest level in nearly 18 months at 1.1223 and keeping the market demand for the AUD high.

• NZD/USD consolidates daily losses above 0.70, still down more than 100 pips on day

There won't be any data featured in the economic calendar from Australia on Friday. Later in the day, existing home sales from the U.S. will be looked upon for fresh impetus; however, it's unlikely to receive any significant reaction from investors, leaving the pair at the mercy of the DXY movements.

Technical outlook

With a daily close above 0.7870 (100-DMA), the pair could extend its gains to 0.7915 (50-DMA) and 0.8000 (psychological level). On the downside, supports could be seen at 0.7830 (20-DMA), 0.7770 (Oct. 11 low) and 0.7730 (Oct. 6 low).

• AUD: An opportunity to buy on dip - ANZ