The Australian Dollar (AUD) traded higher near the 0.6940 level against the US Dollar (USD) on Thursday, supported by a softer Greenback even after the release of stronger-than-expected US jobless claims data [1]. US Initial Jobless Claims fell to 215,000, outperforming expectations of 218,000 and the previous reading of 217,000, indicating that layoffs in the US remain limited and the labor market is stable [1]. Despite this positive labor data, the US Dollar Index (DXY) slipped for a second consecutive session as markets continued to weigh geopolitical risks and the Federal Reserve’s policy outlook [1].
China’s economic data also played a role in influencing the AUD, given Australia’s significant trade ties with China. China’s Producer Price Index (PPI) rose by 4.1% year-over-year in June, marking the fastest increase in four years, while the Consumer Price Index (CPI) slowed to 1% year-over-year, reflecting robust factory-gate inflation but subdued domestic demand [1]. This mixed economic backdrop from China may limit further upside for the AUD, even as it benefits from USD weakness [1].
From a technical perspective, AUD/USD was trading at 0.6939, just above the 100-period Simple Moving Average (SMA), which serves as a pivot point after recent consolidation [1]. The pair also held above the 20-period SMA at 0.6937, providing nearby dynamic support, while resistance was noted between 0.6940 and 0.6946 [1]. The Relative Strength Index (RSI) stood at 55, indicating neutral momentum and suggesting a range-bound near-term outlook [1].
Immediate resistance levels are at 0.6940, 0.6944, and 0.6946, with repeated rejection at these points potentially keeping the pair in a tight range. On the downside, support is first seen at the 20-period SMA (0.6937) and then at 0.6932, with a sustained break below this area possibly leading to a deeper pullback, despite the current neutral momentum [1].
CONCLUSION
The Australian Dollar has firmed against the US Dollar, driven by USD softness and mixed signals from Chinese economic data. While the US labor market remains stable, the Greenback’s lack of traction and technical resistance levels suggest AUD/USD may remain range-bound in the near term.