The AUD/USD pair is having a difficult time setting a short-term direction on Thursday and moves in a narrow 40-pip range as the US Dollar Index, which has been affecting the pair’s movements in the last few days, fails to provide a fresh impetus. At the moment, the pair is down 0.08%, or 6 pips, at 0.7360.
After reaching its 20-day high at 99.77 during the European session, the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, inched lower in the NA session as the weak performance of the U.S. Treasury bond yields impaired the demand for the greenback. At the moment, the index is at 99.50, where it closed the previous day. Until the CPI and the retail sales figures from the United States are released, the pair could find it difficult to move out of that channel as the economic calendar doesn’t offer any data from Australia.
On the technical side, the RSI on the daily graph continues to pull away from 30, suggesting that the pair extends its correction from the oversold area following the heavy sell-off witnessed on Wednesday. Despite that recent retracement, the pair remains in red for the fourth week in a row.
Technical levels to consider
The pair faces the initial short-term support at 0.7330 (May 9 low) ahead of 0.7285 (Jan. 6 low) and 0.72 (psychological level). To the upside, with a break above 0.7400 (psychological level), the pair could aim for 0.7465 (20-DMA) and 0.7540 (200-DMA).