AUD/USD pares some weekly losses, reclaims the 0.7250 amid US dollar weakness

• AUD/USD edges higher as the New York session winds down, up 0.14%.
• The market sentiment is a mixed bag, though risk-sensitive currencies like the AUD, NDZ, and GBP rallied.
• AUD/USD: Despite the pair being up, the mid-term has a downward bias; traders beware of selling pressure around 0.7300.

The Australian dollar bounced off year-to-date lows around 0.7250s, up to 0.7290, then seesawed around the latter and 0.7270 during the New York session. At press time, the pair advances 0.14%, trading at 0.7276.

Sentiment during the American session is mixed, as the S&P 500 and the Nasdaq trade in the green, while the Dow Jones losses. In the FX market, risk-sensitive currencies advance, led by the NZD up 0.57%, while the AUD is up 0.14%. Safe-haven currencies fall except for the CHF, which advances 0.26%.

An absent economic docket in Australia was no excuse for AUD bulls to push the pair higher. It seems that closeness to New Zealand and kiwi strength lifted the aussie in confluence with mixed data from the US. The greenback weakened in a mild-worse than expected US Initial Jobless Claims report that showed that 268K citizens applied for unemployment support, more than the 260K foreseen by analysts.

Putting this aside, Australia’s positive news is that Covid-19 lockdowns in Victoria, one of its largest states, were lifted on Thursday. This is expected to provide a boost to the economy in the upcoming Q4.

On Friday, an empty economic docket for Australia would leave the pair leaning on the dynamics of the greenback. Fedspeakers would continue its weekly parade on the US economic docket with Fed Governor Christopher Waller crossing the wires at 15:45GMT. Further, Vice-Chairman Richard Clarida will speak at 17:15GMT.

AUD/USD Price Forecast: Technical outlook

The AUD/USD pair is trading well below the daily moving averages (DMA’s), indicating the pair has a downward bias. Further, the price is finding strong resistance at the November 12 low at 0.7274, and failure to break above it would leave the AUD/USD exposed to an attack from USD bulls.

In that outcome, the first support level on its way south would be the upslope support trendline around the 0.7230-40 area. A breach of the latter could pave the way for further AUD weakness. The next pivot low would be the September 29 low at 0.7169, followed by the August 20 low at 0.7105.