AUD/USD finds some support at 0.7550 ahead of key US data on Friday

• AUD/USD is momentarily stuck at the 0.7550 support as US stocks are up on Thursday.
• The US Dollar Index is trading at 3.5-month’s high in the 91.50 region. 
• Key macroeconomic data is coming up on Friday in the US, focus on inflation and GDP. 

The AUD/USD is trading at around 0.7567 virtually unchanged on Thursday as it made an attempt to break above the 0.7590 level earlier in the day. 

The AUD/USD is struggling to find a direction as it is finding support at the 0.7550 level since Wednesday. The Aussie has been under heavy pressure in recent days as the US dollar gained some major strength as US Treasury yields rose to levels not seen since January 2014. The 10-year note yield is currently trading at around 3.000%.  

Meanwhile, the US Dollar Index is trading at 3.5 month’s high in the 90.50 region. While some analysts call the move higher on the greenback a short-squeeze and not the start of a new trend, the momentum is strong and the bulls are relentless in their USD purchase. 

However, on Thursday the AUD is less sensitive to USD strength than EUR and GBP. The Australian dollar is correlated to US stocks and the Thursday’s uptick in the US indices is keeping the AUD from falling further against the US dollar. 

Looking ahead, investors and Fed officials will pay particular attention to the Personal Consumption Expenditure index (PCE) on Friday. The PCE is the number one measure of inflation for the Federal Reserve Bank and the data is likely to affect the USD. As strong inflation reading would reassure investors that four rate hikes might be possible in 2018. The core PCE is expected to accelerate at 2.4% from 1.9% in the previous quarter. Equally important on Friday will be the release of the US Gross Domestic Product Annualized for the first quarter which is expected to decelerate to 2% from the 2.9% seen previously.

Earlier in the day, US job data came above expectations while Durable Goods came in mixed. However, the market is likely going to give more importance to the US PCE and GDP on Friday.

AUD/USD 4-hour chart 

The trend is bearish. Supports are seen at the 0.7550 psychological level and the 0.7500 handle while resistance is priced in at the 0.7600 and 0.7700 handles.