AUD/USD erases early losses, turns flat around 0.7750
- AUD/USD stays in a consolidation phase on Friday.
- US Dollar Index struggles to stage a convincing rebound.
- Investors await UoM Consumer Sentiment Index data from US.
The AUD/USD pair rose for the third straight day and registered the highest daily close since March at 0.7750 on Thursday. Although AUD/USD staged a technical correction and dropped to 0.7720 area during the Asian trading hours on Friday, it didn't have a difficult time erasing its losses and was last seen trading flat at 0.7752.
DXY remains on the back foot
The heavy selling pressure surrounding the greenback and the risk-positive market environment allowed AUD/USD to post strong gains in the second half of the week.
Pressured by the sharp decline witnessed in the 10-year US Treasury bond yield, the US Dollar Index (DXY) fell to its lowest level in nearly a month at 91.49 on Thursday. At the moment, the DXY is down 0.15% at 91.52. Additionally, Wall Street's main indexes surged higher on the back of strong data releases and allowed risk-sensitive AUD to continue to find demand.
Retail Sales in the US increased by 9.8% on a monthly basis in March and the Initial Jobless Claims fell to the lowest level in nearly a year at 576,000.
Later in the session, the University of Michigan's Consumer Sentiment Index, Housing Starts and Building Permits data will be featured in the US economic docket. Meanwhile, the S&P 500 Futures are virtually unchanged on the day, suggesting that the market action is likely to remain subdued ahead of the weekend.
Technical levels to watch for