Aussie foreign exchange market report today: The Australian dollar against the US dollar benefited from a rebound in risk sentiment, and the currency pair tested key support

The Aussie bottomed out and rallied against the dollar as traders' risk sentiment was heightened ahead of the Jackson Hole summit. The Aussie rose to 0.6480 against the dollar on Thursday, its highest level since August 16, and the dollar index (DXY) fell 20 basis points.

The Aussie bottomed out and rallied against the dollar as traders' risk sentiment was heightened ahead of the Jackson Hole summit. The Aussie rose to 0.6480 against the dollar on Thursday, its highest level since August 16, and the dollar index (DXY) fell 20 basis points.

Risk sentiment spread through markets overnight as traders prepared for their next meeting on Friday, with 10-year Treasury yields down 2 per cent to 4.20 per cent and 30-year yields down 2.87 per cent to 4.30 per cent.

Meanwhile, the dollar index fell 20 basis points to $103.27 as the recovery in U.S. stocks gained momentum. The Dow Jones index rose 207 points to $34,500, while the Nasdaq 100 and Standard & Poor 500 rose 231 points and 50 points, respectively.

The risk sentiment followed mixed economic data from the US and Australia, where the country's statistics agency said retail sales fell 3.5 per cent in the second quarter, following a 3.1 per cent increase in the previous quarter.

Last week, a report from the Australian Bureau of Statistics showed that the country's job market was also in decline. In addition, a report from Judo Bank on Wednesday showed that the PMI for services and manufacturing fell to 46.7 and 49.4 respectively. Therefore, with China's economy faltering, the RBA may suspend interest rate hikes.

The US also reported weaker than expected manufacturing and services PMIs, which showed the manufacturing PMI fell to 47 and the services PMI fell to 51.

The AUD/USD currency pair will react to upcoming U.S. durable goods orders. Economists expect data to show durable goods fell 4% in July, while core orders rose 0.2%.

AUD/USD currency pair technical analysis

The AUD/USD pair has been trading in a narrow range over the past few weeks. It is trading at 0.6480, above the low of the month at 0.6364. The pair is slightly above the 50-cycle moving average.

At the same time, the Aussie dollar forms an upward channel, marked in green. Arguably, this channel is a bearish signal. Therefore, the pair may witness a downside breakout ahead of the upcoming Jackson Hole summit. However, if the pair is supported below the channel, it is possible to establish a bottom pattern and thus bottom out.

At 15:15 Beijing time, the Australian dollar was trading at 0.6421/23 against the US dollar.