The Australian Dollar (AUD) recovered against the US Dollar (USD) on Friday, with the AUD/USD pair trading higher near 0.6980 after an initial decline. This rebound was driven by a mixed batch of US economic data that weakened the USD. US Housing Starts increased to an annualized 1.43 million in June, surpassing expectations of 1.31 million and rising from the previous 1.20 million. However, Building Permits declined to 1.37 million month-over-month, falling short of the 1.40 million forecast and the prior 1.41 million, marking a 3.0% annual decrease [1]. US Industrial Production rose only 0.1% month-over-month, missing the expected 0.2% increase and matching the previous reading [1]. The preliminary University of Michigan Consumer Sentiment Index improved to 54.4 in July from 49.5, beating the market forecast of 51.0. The Consumer Expectations Index also climbed to 54.0 from 50.7 [1].
Federal Reserve Bank of Cleveland President Beth Hammack maintained a cautious stance, stating that inflation remains broad-based and persistently elevated. She highlighted ongoing pressures faced by businesses, including energy costs, insurance, supply-chain disruptions, and the expansion of artificial intelligence (AI) data centers [1].
From a technical perspective, AUD/USD trades at 0.6982 on the 4-hour chart. The pair is positioned between the 20-period Simple Moving Average (SMA) at 0.6988, which acts as immediate overhead resistance, and the 100-period SMA at 0.6934, providing broader trend support. The near-term bias is neutral, with the latest 14-period Relative Strength Index (RSI) around 52 indicating mildly constructive momentum but not enough to overcome resistance just above the market [1]. Initial resistance is seen at 0.6986 and 0.6988, with a significant cap at 0.7001. Nearby support is clustered at 0.6977 and 0.6974, while deeper structural support aligns with the 100-period SMA at 0.6934 [1].
CONCLUSION
Mixed US economic data led to a weakening of the US Dollar, allowing the Australian Dollar to recover and trade higher. While technical indicators suggest a neutral near-term bias, the market remains attentive to resistance and support levels. The cautious stance from the Federal Reserve and ongoing business pressures may continue to influence currency movements.