AUD/USD’s bullish reaction hits resistance at 0.7320 area
- AUD/USD's recovery from 0.7250 stalls below 0.7320
- The aussie appreciates as market sentiment improves.
- AUD/USD: unlikely to rise past 0.7350 – Westpac
The Australian dollar has pushed higher on Friday, bouncing up from 0.7250 to take back most of the ground lost on Thursday, before hitting resistance at 0.7320. The pair, however, is holding firm above 0.7300, on course to a 0.7% weekly gain.
The aussie appreciates on a brighter market sentiment
The overall appetite for risk witnessed on Friday, with the market shifting its focus again to the progress on the diverse COVID-19 vaccines has fuelled the Australian dollar against a broadly weaker USD.
The announcement from drugmaker Pfizer and BioNTech that they will be requesting US regulators for an emergency-use authorization has boosted hopes that the vaccine might be available late December or early January. This has eased previous fears about the surging coronavirus cases triggering a risk rally in the European session time, that has lost momentum during the US trading hours.
The US Dollar Index lost ground during the Asian session, to revisit week lows at 92.20 area, although it has managed to bounce up, with risk appetite fading during the US session, turning positive on the day.
AUD/USD likely to be capped below 0.7350 – Westpac
From a technical point of view, Westpac’s FX Analysis team do not expect the aussie to reach further than 0.7350: “The combination of positive vaccine news, record China steel production driving record demand for iron ore and commodities in general, plus Lowe’s comments that ‘negative rates were still extraordinarily unlikely in Australia’ have lifted A$ sentiment in recent sessions (…) We still see fresh closures/curfews and stay at home orders in the US and Europe as capping 0.7350 for now.”
Technical levels to watch