- AUD/USD remains pressured towards the yearly low after two-day downtrend.
- US CPI propels reflation woes but Fed’s Powell could keep defending current policy.
- Aussie covid infections ease from the highest since September, PM Morrison announced increase in support payments.
- Australia Westpac Consumer Confidence eyed, RBNZ and Fed’s Powell will also decorate calendar.
AUD/USD bears keep controls for the third consecutive day as the quote stays heavy around 0.7445 amid early Wednesday morning in Asia. The Aussie pair registered the biggest daily losses in four the previous day as the US dollar index (DXY) rallied the most in a month.
The eternal power of greenback bulls…
Be it the resurgence of the coronavirus (COVID-19) woes in the West or reflation fears, markets have all the reasons to put safe-haven bids under the US dollar. The result being the greenback gauge’s jump to the three-month high, flashed last week.
The UK registers the most covid-led deaths since April whereas the total infections ease in Australia from 120, the highest in 10 months to 100. Even so, the death toll in New South Wales (NSW) and Queensland keeps policymakers worried and rush for more jabbing in the Oz nation. Elsewhere, the US authorities discuss the need for the third covid vaccine shot.
The fears of the covid resurgence become stronger amid the variants’ ability to spread faster as well as having resistance to the vaccines. The same could weigh on the latest economic transition of the pandemic and back the rush to risk-safety.
Other than the covid fears, reflation fears also pleased the USD bulls as the US Consumer Price Index (CPI) rose past 4.9% expected to 5.4% YoY while the core reading was also upwardly revised from 3.8% to 4.5%. Even so, Fed Chairman Jerome Powell’s Testimony on the Semi-Annual Monetary Policy Report before the House Financial Services Committee may reiterate the “transitory” outlook for price pressures as details of the data has been supportive to what the Fed Chief has been saying.
Alternatively, Aussie PM Scott Morrison announced an increase in emergency disaster payments to individuals and jointly funded payments to businesses, on certain conditions, to battle the covid-led losses.
It’s worth noting that China’s trade numbers helped AUD/USD to test the 0.7500 level earlier in Asia on Tuesday but National Australia Bank’s (NAB) figures couldn’t please the bulls.
Amid these plays, US equities stepped back from the record top flashed the previous day whereas US 10-year Treasury yields rose 5.5 basis points (bps) to 1.418% by the end of Tuesday’s trading.
Looking forward, COVID-19 updates and comments from the Fed policymakers will be the key to follow whereas July’s Westpac Consumer Confidence for Australia, prior -5.2% could offer immediate direction.
Unless crossing 200-DMA, around 0.7585, on a daily closing, AUD/USD stays poised to refresh the yearly low near 0.7410. However, any further downside will be challenged by a short-term descending trend line from June 18, close to 0.7395.
Additional important levels
|Today last price||0.7445|
|Today Daily Change||-0.0030|
|Today Daily Change %||-0.40%|
|Today daily open||0.7475|
|Previous Daily High||0.7496|
|Previous Daily Low||0.7448|
|Previous Weekly High||0.7599|
|Previous Weekly Low||0.7409|
|Previous Monthly High||0.7794|
|Previous Monthly Low||0.7477|
|Daily Fibonacci 38.2%||0.7466|
|Daily Fibonacci 61.8%||0.7477|
|Daily Pivot Point S1||0.745|
|Daily Pivot Point S2||0.7424|
|Daily Pivot Point S3||0.7401|
|Daily Pivot Point R1||0.7498|
|Daily Pivot Point R2||0.7521|
|Daily Pivot Point R3||0.7547|
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD stays below 1.0900 as Q1 comes to an end
EUR/USD has lost its traction and declined below 1.0900 in the American session on Friday. Quarter-end flows seem to be allowing the US Dollar find some demand but the risk-positive market environment seems to be limiting the pair's downside ahead of the weekend.
GBP/USD trades below 1.2400, looks to post weekly gains
GBP/USD has edged lower after having tested 1.2400 earlier in the day but remains on track to end the third straight week in positive territory. The upbeat mood remains intact after soft PCE inflation data from the US, making it difficult for the US Dollar to continue to gather strength.
Gold tries to stabilize near $1,980 following earlier spike
Gold price has returned to the $1,980 area following a spike above $1,987 with the initial reaction to lower-than-expected PCE inflation figures from the US. Meanwhile, the benchmark 10-year US Treasury bond yield stays in the red near 3.5%, providing support to XAU/USD.
Will Dogecoin price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. The recent recovery above the range low looks promising and hints at an explosive move for next week.
Week ahead – Nonfarm payrolls to set the tone for US dollar
With the banking turmoil receding, market participants will turn their attention back to economic releases. The spotlight will fall on the US employment report.