AUD/USD stumbles from weekly highs, back below the 50-DMA

• AUD/USD hit a weekly high of around 0.6956, but data and sentiment bolstered the greenback.
• Higher US Treasury bond yields underpinned the US dollar, a headwind for the AUD/USD.
• US consumer confidence improves while job openings increase.

The AUD/USD faced solid resistance at around the 20-day EMA at 0.6959, diving below the 0.6900 figure amid a risk-off impulse, with the US dollar regaining composure edging higher, underpinned by rising US Treasury bond yields. Global equities remain heavy due to expectations of an aggressive Federal Reserve following Chair Powell’s remarks.

The AUD/USD hit a daily high early in the European session, climbing towards the 0.6956 figure, though it retreated as sentiment shifted sour. Meanwhile, mixed US economic data turned out to be bad news for the AUD/USD, sliding towards its daily low at 0.6858 in the North American session. At the time of writing, the AUD/USD is trading at 0.6878, below its opening price.

AUD/USD edges lower on US dollar strength after mixed US data

The US Dollar Index, a gauge of the buck’s performance vs. a basket of six currencies, advances 0.21%, up at 198.976, while the US 10-year benchmark note sits at 3.13%, up two bps.

Meanwhile, US consumer confidence surprised to the upside, to 103.2, higher than estimates of 98, according to Reuters. “Looking ahead, August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term,” said Lynn Franco, senior director at the Conference Board.

Additionally, the US Department of Labor reported that job openings, as released by the JOLTs Opening report, unexpectedly uptick in July, with vacancies increasing up to 11.2 million, above all estimates. The same report showed that quits easied from 2.8% to 2.7%.

Elsewhere, in the Asian session, Australia’s consumer confidence, as reported by the ANZ Morgan Consumer Confidence, softened by 0.7%. At the same time, housing data showed the impact of higher rate hikes, which increased mortgage rates.

Analysts at ANZ bank commented that rate hikes and increases in the cost of debt contributed to the decline in Building Approvals. They added, “We expect total building approvals to keep falling as more rate hikes put downward pressure on the borrowing capacity of both developers and individual home builders.”

What to watch

The Australian economic docket is light, contrarily to the US, where ADP figures, Fed speaking, ISM PMI, and the Nonfarm Payrolls report, are expected to offer fresh impetus to AUD/USD traders.

AUD/USD Key Technical Levels