- The Australian dollar drops as the Wall Street session approaches the end, down 0.14%.
- The US 10-year Treasury yield reclaims the 1.40% threshold, underpins the greenback.
- AUD/USD Technical Outlook: It has a downward bias, though upside risks remain.
During the New York session, the AUD/USD edges lower, trading at 0.7111 at the time of writing. The market sentiment remains downbeat, spurred by the Omicron outbreak worldwide. The UK and some European countries reimpose social restrictions as health government offices scramble to contain the fourth wave.
In the meantime, the US Dollar Index recovers some of its losses, almost flat at 96.55, as US Treasury yields with the 10-year benchmark note, reclaim the 1.40% threshold, up to two basis points, sitting at 1.423%.
An absent economic docket leaves the AUD/USD pair at the mercy of market sentiment and greenback’s dynamics, including political domestic developments and demand for US Treasuries.
AUD/USD Price Forecast: Technical outlook
The AUD/USD daily chart depicts that the pair has a downward bias. The double-top formed in the month, still in play as long as the 0.7186 December swing high is decisively broken to the upside. Nevertheless, despite Australian dollar weakness across the board, Monday’s price action pierced the “neckline” around the December 14 swing low at 0.7090. However, it failed to gain follow-through, pushing the AUD/USD around 0.7111.
If USD bulls achieve to break clearly below the neckline, the first support would be the 0.7000 figure, followed by the 0.6900, and then the June 12, 2020 pivot low at 0.6799.
To the upside, the first resistance would be the December 17 daily high at 0.7184. A sustained break above that level could pave the way for further gains, with the 0.7200 figure as the next resistance, followed by the confluence of the 50 and the 100-day moving averages (DMAs) at 0.7290-0.7300 area.
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