|

AUD/USD battles at the 20-DMA at around 0.7030s on risk-aversion

  • Despite falling on Friday, the AUD/USD is up in the week by 1.34%.
  • Sentiment fluctuated negatively in the last hour, dragging the AUD/USD lower.
  • AUD/USD Price Forecast: A daily close below the 20-DMA could pave the way towards the YTD low below 0.6850.

The Aussie dollar is struggling at the 20-day moving average (DMA) and is losing the battle as the AUD/USD looks forward to resuming the prevailing downtrend, as the 50-DMA crosses below the 100-DMA, further confirming the bias. At 0.7030, the AUD/USD reflects the greenback’s strength as sentiment turned sour.

Sentiment fluctuated negatively in the last hour, dragging the AUD/USD lower

Earlier in the day, Wall Street opened higher, influenced by the positive mood carried on from the Asian and European sessions. The People’s Bank of China (PBoC) rate cut to the 5-year Loan Prime Rate (LPR) from 4.60% to 4.45% was cheered by investors, a signal that Chinese authorities would keep supporting the economy, despite zero-tolerance Covid-19 restrictions. Nevertheless, the mood shifted in the last hour.

During the week, the Australian dollar benefitted from positive employment data, despite that the Wage Price Index (WPI) rose lower than estimations. However, the Full-time employment crushed expectations, and the Unemployment Rate down ticked, lifting the AUD/USD above 0.7070s, weekly highs.

On Friday, the story is different, as risk-aversion, which kicked in since Thursday’s though was ignored by FX market players, is taking a toll on the AUD/USD, sending the major tumbling below the 20-DMA and threatening to open the door for a move towards 0.7000.

On the US front, an absent economic docket, which witnessed earlier in the week a parade of Fed speakers, is not doing much for the greenback, which is strengthening in the session as reflected by the US Dollar Index up 0.26%, back above the 103.000 mark.

AUD/USD Price Forecast: Technical outlook

The AUD/USD is still downward biased, despite Thursday’s rally, which lifted the pair from below 0.7000s towards weekly highs. A Friday’s daily close below the 20-DMA at 0.7039 would expose the major to selling pressure.

Therefore, the major’s path of least resistance continues downwards. The AUD/USD first support would be 0.7000. Break below would expose the 0.6900 mark, followed by the bottom band of the Bollinger band’s indicator at 0.6850 and then the YTD low at 0.6828.

AUD/USD

Overview
Today last price0.7030
Today Daily Change-0.0024
Today Daily Change %-0.34
Today daily open0.7048
 
Trends
Daily SMA200.7053
Daily SMA500.7279
Daily SMA1000.7238
Daily SMA2000.7264
 
Levels
Previous Daily High0.7073
Previous Daily Low0.6952
Previous Weekly High0.7074
Previous Weekly Low0.6828
Previous Monthly High0.7662
Previous Monthly Low0.7054
Daily Fibonacci 38.2%0.7027
Daily Fibonacci 61.8%0.6998
Daily Pivot Point S10.6976
Daily Pivot Point S20.6903
Daily Pivot Point S30.6854
Daily Pivot Point R10.7097
Daily Pivot Point R20.7146
Daily Pivot Point R30.7219

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks
Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.
Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.