AUD/USD bears drill multi-day bottom to approach 0.6500 as US Dollar traces firmer yields
|- AUD/USD refreshes yearly bottom as traders rush to US Dollar amid market’s indecision.
- Fears of US default contrast with policymakers’ optimism to keep trouble traders.
- RBA vs. Fed divergence regain attention after RBNZ’s dovish hike.
- Risk catalysts, second-tier data can entertain intraday Aussie pair traders.
AUD/USD takes offers to renew the lowest levels in six months around 0.6520 heading into Thursday’s European session. In doing so, the Aussie pair justifies the market’s US Dollar demand amid indecision surrounding the US debt ceiling extension and the Fed concerns.
Following the Reserve Bank of New Zealand’s (RBNZ) dovish hike, the market participants expect the Reserve Bank of Australia (RBA) policymakers to follow the neighbor’s steps and amplify the RBA versus Fed divergence. The same joins this week’s FOMC Minutes and the Fed talks to weigh on the Australian Dollar (AUD).
As per the Minutes of the latest Federal Open Market Committee (FOMC) Meeting, the policymakers are divided about the latest 0.25% rate hike from the US central bank. The same doubts the market’s bets on another such move in June even if Atlanta Fed President Raphael Bostic and Federal Reserve Governor Christopher Waller prod the hawkish Fed concerns.
Elsewhere, US policymakers’ inability to deliver a debt ceiling extension deal and the looming long weekend for the House Representatives contrasts with the negotiators’ view that they see progress in the latest rounds of talks. Even so, global rating agencies like Fitch and Moody’s turned cautious about the US credit rating status while the US Treasury Department accepted their fears.
Against this backdrop, the US stock futures lick its wounds while the US Treasury bond yields remain firmer at the highest levels since mid-March.
Looking ahead, the US weekly Jobless Claims, the Chicago Fed National Activity Index and Pending Home Sales will decorate the calendar but the debt ceiling talks will be crucial to watch for clear directions.
Technical analysis
AUD/USD pair’s sustained downside break of an 11-week-old support-turned-resistance and the 61.8% Fibonacci retracement of the quote’s October 2022 to February 2023 upside, respectively near 0.6620 and 0.6550, keeps bears hopeful. That said, the 61.8% Fibonacci Extension (FE) of its February-May moves, near 0.6445, lures the pair sellers.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.