AUD/USD rose near 0.6980 on Friday, recovering from an initial decline as the US dollar (USD) loses ground following a mixed batch of economic data from the United States (US). Stronger home construction starts and consumer sentiment were offset by weaker building permits and weaker industrial production prints.
U.S. housing starts rose to a year-over-year rate of 1.43 million in June, topping expectations of 1.31 million and up from the previous high of 1.20 million. However, the number of building permits fell to 1.37 million m/m, below the forecast of 1.40 million and the previous 1.41 million. Building permits decreased by 3.0% year-over-year.
US industrial production rose only 0.1% m/m, exceeding expectations for a 0.2% augment and matching the previous reading. Meanwhile, the University of Michigan’s preliminary consumer sentiment index improved to 54.4 from 49.5 in July, exceeding the market forecast of 51.0. The Consumer Expectations Index also increased to 54.0 from 50.7.
Federal Reserve Bank of Cleveland President Beth Hammack maintained a cautious stance, saying inflation remains broad-based and persistently elevated. She noted that enterprises face pressures related to energy, insurance, supply chain disruptions and the rise of artificial intelligence (AI)-based data centers.
Short-term technical analysis:
On the 4-hour chart, the AUD/USD rate is 0.6982. The pair is positioned between the 20-period straightforward moving average (SMA) at 0.6988, acting as direct overhead resistance, and the 100-period SMA at 0.6934. This provides broader trend support while leaving the short-term bias neutral. The latest 14-period relative strength index (RSI) of around 52 suggests moderate constructive momentum, but not enough to offset the nearby resistance cluster just above the market.
Upside, initial resistance is seen at the horizontal barrier at 0.6986, closely followed by the 20-period SMA at 0.6988, with a more significant barrier emerging at 0.7001. On the other hand, nearby support centers on the 0.6977 and 0.6974 levels, while deeper structural support lines up with the 100-period SMA at 0.6934, which will emerge if sellers regain control.
(The technical analysis for this story was written with the assist of an AI tool. Find out more.)
