AUD/USD: small rebound from 0.7450 amid USD profit-taking
|- On Tuesday the US Dollar Index rose strongly and tested last week’s highs on the back rising bond yields.
- The 10-year US Treasury yield benchmark rose as high as 3.07% on Tuesday which is a level not seen since 2011.
- Some USD profit-taking is sparking a counter-trend move up in AUD/USD.
The AUD/USD is trading at around 0.7476 down 0.67% on Tuesday.
The Aussie dropped steadily throughout the trading day. A couple of hours before the European forex close, the AUD/USD rebounded from the 0.7450 level and managed to rose about 35 pips amid broad-based USD profit-taking.
The 10-year US Treasury yield benchmark rose as high as 3.07% on Tuesday which is a level not seen since summer 2011. Investors are getting rid of risky assets such as stocks and bonds to hoard the interest-yielding and safer US paper. In fact, the Federal Reserve Bank is expected to raise interest rates three to four times in 2018.
Meanwhile, the US Dollar Index (DXY) has tested the high of last week and is now retracing quite heavily TO the 93.10 region from the American session’s high at 93.46.
Gold prices on Tuesday broke yearly lows below the $1,300 a troy ounce which is a strong psychological level and below the 200-period simple moving average on the daily time-frame. The strong selling pressure in the yellow metal is negatively impacting the commodity-linked currency AUD.
AUD/USD 4-hour chart
The main trend is bearish and immediate support is seen at the 0.7450 level (low of the day) followed by 0.7411 cyclical low. To the upside, resistances are the 0.7500 handle and the 0.7640 previous supply level. The Aussie is trading below its 50, 100 and 200-period SMA suggesting strong downward momentum.
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.