AUD/USD clings to recovery gains above 0.7500
- AUD/USD rebounds above 0.7500 following last week's slump.
- US Dollar Index stays deep in the red on Monday.
- Retail Sales in Australia rose less than expected in May.
After dropping to the lowest level of 2021 at 0.7463 on Friday and losing nearly 3% on a weekly basis, the AUD/USD pair is staging a rebound on Monday. As of writing, the pair was trading at 0.7510, rising 0.45% on a daily basis.
DXY starts correcting last week's upsurge
Last week, the broad-based USD strength on the back of the US Federal Reserve's hawkish policy outlook forced AUD/USD to suffer heavy losses. The US Dollar Index (DXY) gained 2% last week and reached its highest level in more than two months at 92.40. In the absence of high-tier data releases and fundamental developments, the DXY seems to have gone into a consolidation phase and was last seen losing 0.28% at 92.07.
Earlier in the day, the data published by the Australian Bureau of Statistics showed that Retail Sales in May rose by 0.1%, falling short of the market expectation of 0.7%. Nevertheless, this figure was largely ignored by market participants.
On the other hand, the Federal Reserve Bank of Chicago's monthly publication revealed that the National Activity Index improved modestly to 0.29 in May from -0.09 in April.
In the meantime, the S&P Futures are up 0.45% on the day, suggesting that the greenback could remain on the back foot if risk flows continue to dominate the financial markets in the second half of the day.
Technical levels to watch for