AUD/USD stays in the negative territory below 0.7400 ahead of US inflation data

• AUD/USD struggles to stay above 0.7400 on Friday.
• US Dollar Index moves sideways below 92.00 during the European session.
• Focus shifts to US PCE inflation data for June.

After posting modest daily gains on Thursday, the AUD/USD pair stayed relatively quiet around 0.7400 during the Asian trading hours on Friday but came under modest bearish pressure ahead of the American session. As of writing, the pair was down 0.35% on the day at 0.7370.

Market mood sours ahead of US inflation data

The negative shift witnessed in market sentiment seems to be making it difficult for the AUD to stay resilient against its rivals while helping the US Dollar Index gains traction. Reflecting the risk-averse market environment, S&P Futures and Nasdaq Futures are down 0.6% and 1%, respectively, suggesting Wall Street's main indexes could open deep in the negative territory. In the meantime, the US Dollar Index, which fell to a monthly low of 91.78 on Friday, is little changed on the day at 91.85.

Later in the session, the US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred gauge of inflation, data for June. Investors expect the Core PCE Price Index to rise to 3.7% on a yearly basis from 3.4% in May.

On the other hand, the data from Australia revealed that the Private Sector Credit rose by 0.9% in June, surpassing the market expectation of 0.1%. Additionally, the annual Producer Price Index jumped to 2.2% in the second quarter from 0.2%.

Technical levels to watch for