Australian Dollar finishes the week with a rebound as the USD eases

• The US Dollar Index has pulled back from its yearly high, helping to limit the decline of the Aussie Dollar.
• Weak Australian labor data pushes the pair downwards on Friday.
• Hawkish bets on the RBA might also help the Aussie.

The AUD/USD pair rose by 0.20% to 0.6460 in Friday's session. The Australian Dollar staged a comeback as the US Dollar Index (DXY) pulled back from its yearly highs. However, the Aussie Dollar may face challenges due to recent weak domestic and Chinese economic data. On the bright side, Reserve Bank of Australia (RBA) Governor Bullock stated that current interest rates will remain unchanged until the bank gains confidence in the inflation outlook.

Weak Australian labor data, released on Friday, revealed a loss of 8,100 jobs during October, adding to concerns over the strength of the Australian economy. This, coupled with disappointing Chinese data, could cap the recovery of the Aussie Dollar in the near term. Despite these headwinds, the recent hawkish comments from RBA Governor Bullock, who hinted at the possibility of further rate hikes to tame inflation, could provide some support for the Australian Dollar.

Daily digest market movers: Australian Dollar rebounds on weaker US Dollar Index after Retail Sales

• The AUD rebounds against the USD on Friday.
• The USD softens despite better-than-expected US Retail Sales data ahead of the crucial holiday shopping season.
• US Retail Sales expanded by 0.4% in October, exceeding expectations and surpassing September's growth.
• Retail Sales Control Group contracted by 0.1%, while excluding Autos sales grew 0.1% MoM, below consensus.
• Traders pare back bets on another Fed interest rate cut in December due to Powell's remarks.
• Markets price in a 25 bps RBA cut only in May 2025, which diverged with the markets' bet on the Fed, which could eventually help the Aussie.

AUD/USD technical outlook: Pair sees some light, outlook still negative

While the brief recovery toward 0.6460 provided temporary respite, the AUD/USD pair remains firmly within a downtrend. Key technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) continue to reside deep within bearish territory, highlighting the dominance of selling pressure. This technical outlook implies that the corrective bounce is likely to be short-lived, with the path of least resistance remaining to the downside.