The Australian Dollar (AUD) traded slightly higher near the 0.7010 level against the US Dollar (USD) on Thursday, extending its recent recovery as the USD struggled to gain sustained momentum following mixed US economic data [1]. US Initial Jobless Claims declined to 208,000 for the week ending July 11, outperforming expectations of 217,000 and the previous reading of 216,000, indicating continued resilience in the US labor market [1]. However, US Retail Sales increased by only 0.2% month-over-month in June, matching expectations but slowing sharply from the previous 1.0% rise. The Retail Sales Control Group also grew 0.5%, in line with forecasts but below May’s 0.8% increase, signaling a slowdown in consumer spending that limited demand for the Greenback and supported the AUD/USD above the 0.7000 psychological level [1].
In Australia, Consumer Inflation Expectations declined to 4.7% in July from 5.5% previously, suggesting that household inflation concerns are easing. This development could reduce pressure on the Reserve Bank of Australia (RBA) to maintain a hawkish monetary-policy stance [1].
From a technical perspective, AUD/USD trades at 0.7011, maintaining a bullish near-term tone as it holds above both the 20-period Simple Moving Average (SMA) at 0.6972 and the 100-period SMA at 0.6929. The pair faces resistance at 0.7013 and 0.7021, while the Relative Strength Index (RSI) is just below the overbought threshold at 69.6, indicating strong but stretched upside momentum [1]. Initial support is seen at 0.7001, with further support at 0.6996 and the 20-period SMA at 0.6972. A deeper pullback could expose the 100-period SMA at 0.6929 as a more significant technical base, while sustained trading above resistance levels could open the door for further gains in the broader recovery [1].
CONCLUSION
The Australian Dollar's resilience above 0.7000 is underpinned by slowing US retail sales and easing Australian inflation expectations, which together have limited USD demand and supported the AUD. Technical indicators suggest a bullish near-term outlook, though momentum appears stretched. Market participants will be watching for further developments in US economic data and RBA policy signals.