AUD/USD keeps pushing against the 0.6800 resistance area on pre-holiday trading

• The Aussie, rejected at 0.6805, remains close to the 0.6800 resistance area.
• A mild risk aversion on the back of COVID-19 cases in China keeps AUD bulls in check. 
• AUD/USD is set to end the year with a nearly 6.5% decline.

The Aussie has spiked up to two-week highs at 0.6805 during Friday’s European trading. although the pair is lacking follow-through above the 0.6800 resistance area and has retreated to 0.6795 so far.

The AUD remains bid on a sluggish market session

The Australian Dollar appreciates for the sixth consecutive day on Friday, unfazed by the moderate risk aversion, with the USD showing a soft tone across the board.

On Thursday, the US Department of Labor reported an increment of 9,000 on the weekly jobless claims, to a total amount of 225K. Continuous claims rose to 1.71M from 1.669M in the same week, which increased doubts about the US economic momentum and added selling pressure to the USD.

The pair however is hesitating at 0.6800 amid the growing uncertainty regarding the evolution of the recent COVID-19 outbreak in China, which has dampened previous hopes of a strong rebound in the Chinese economy and is casting doubts about the global economic outlook.

AUD/USD, on track to a nearly 6.5% decline in 2022

Looking back, the US Dollar is about to post solid performance in 2022, having appreciated about 6.5% over the last 12 months.

After a rather positive year opening, the risk-sensitive Aussie dropped steadily from March on, as the Russian invasion in Ukraine hammered risk appetite and aggravated fears of a global economic slowdown.

At the same time, the aggressive monetary tightening pace adopted by the Federal Reserve, which has raised rates by 425 basis points in 2022 acted as a tailwind for the US dollar.

The pair bottomed at a two-year low at 0.6175 in October and has been appreciated steadily ever since as speculation about an economic recession in the US and expectations of a slower Fed monetary tightening next year have hurt USD's demand across the board.

Technical levels to watch