The Australian economy is looking stronger according to October data released this week. Exports in October declined by 3% month-on-month compared to 6% in the previous month despite continuous tension with China, while retail sales were up by 4.9% against 1.3% in September. It seems that the Australian economy is compensating for some export losses from China with growing domestic demand. This is confirmed by rising Q3 GDP that was up by 3.9% against 3% expected by analysts.
Such developments may attract elevated interest to the AUDUSD. The Greenback is usually the leader in this pair and the American currency managed to push the Australian Dollar to 0.7060 from 0.7560 at the end of October. However, the Dollar has been seen to lose steam recently as the U.S. Dollar index rebounded from a 97 point high in November to 95.86 points on December 2 amid fears over the new Omicron coronavirus variant and the recovery of the U.S. economy. The positioning of the U.S. Dollar may push the Aussie higher with a little delay, and the continuous economic recovery in Australia may also lead to the rise of the currency. There are also some technical reasons for the Aussie to climb. The AUDUSD has recently hit a major support level on the daily timeframe chart at 0.71. The entire decline from the maximum of late October almost moved without any corrections, so the rebound, even in a form of a correction, may be justified.
Another reason for the upside recovery of the Aussie may come to light on December 3 if the Non-Farm Payrolls data fails to satisfy the U.S. Dollar bulls. The nearest upside target is at 0.72, and the next one is at 0.7250-0.7300.
Nevertheless, the upward trend for the U.S. Dollar is still intact and this possible upside move of the Aussie may rather be a correction than a change of the running trend. This development may further support a rebound of the Australian Dollar.
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