AUD/USD climbs 1% on Thursday as DXY recedes

The AUD/USD has rebounded from recent lows, pushed higher by a retreating US Dollar.
Australian economic data remains on the weak side, but broader market flows are determining direction.
Markets are looking ahead to US PCE inflation figures on Friday.

The AUD/USD has caught a much-needed bounce from near-term lows around 0.6340, and the pair is up over 1% after reclaiming the 0.6400 handle in Thursday trading. The Aussie-Dollar pairing is currently taking a breather and marking in territory near 0.6420.

Australian Retail Sales came in below expectations early Thursday, printing at a seasonally-adjusted 0.2% for the month of August. The previous reading saw 0.5%, and the actual headline figure failed to meet market forecasts of 0.3%.

US data came in mixed on Thursday, with Gross Domestic Product (GDP) hitting the middle at expectations.

US GDP for the second quarter printed as-expected at 2.1% over the previous quarter; Initial Jobless Claims improved slightly, from 202K to 204K.

The downside came from US Pending Home Sales for August, which clocked in an abysmal -7.1%, far below the forecast -0.8% and a complete reversal from the previous print of 0.9%.

All that’s left on the economic calendar data docket for the US Dollar is Friday’s Personal Consumption Expenditure (PCE) Price Index. August’s PCE is forecast to hold steady at 0.2%.

AUD/USD technical outlook

The Aussie broke loose from recent intraday bearish action, jumping up a full percentage point to ping against the 200-hour Simple Moving Average near 0.6420.

Near-term technical resistance sits at the last swing high last week near 0.6460, and bidders will be looking to catch support from the 100-hour SMA currently drifting into the 0.6400 handle.

The overall trend still remains firmly bearish, and the AUD/USD remains well off recent highs on the daily candlesticks. Price action will see resistance from the 34-day Exponential Moving Average (EMA) just north of 0.6450, while downside momentum will see a support zone baked in at recent swing lows between 0.6400 and 0.6350.