AUD/USD rises further to the 0.7270 area, erases weekly losses

• US dollar corrects to the downside on Friday, despite US data.
• AUD/USD holding above the key 0.7220 area.

The AUD/USD rose further on Friday supported by a weaker greenback and reached a three day high at 0.7273, before pulling back to 0.7255 following the ISM report.

US data helps USD

Economic data from the US came in mostly above expectation and limited the correction of the greenback. The PCE Core rose 3.6% in August from a year ago, similar to July and in line with expectations. The Markit PMI for September was revised from 60.5 to 60.7; the ISM came in at 61.1 against market consensus of 59.6. The latest report was University of Michigan’s Consumer Confidence, with the main index rising to 72.8, above the 71.0 expected.

The economic numbers did not send the US Dollar to positive ground but probably limited the correction. The DXY is falling 0.18% as it trades at 94.10. The US 10-year yields stand at 1.48%, far from the weekly top.

Holding above 0.7220/30

The recovery in AUD/USD improved the outlook for the aussie after recovering the 0.7220/30 area, a key technical level. A slide back below should trigger momentum for the greenback.

If the recovery continues, the next relevant resistance is seen at 0.7295 (20-day simple moving average) and then 0.7315/20.

Technical levels