AUD/USD bounces off lows, holds steady above mid-0.7300s

AUD/USD found some support near the 0.7335 region on Monday amid the prevalent risk-on mood.
Hawkish Fed expectations continued to underpin the USD and kept a lid on any further move up.
Investors now look forward to this week’s important macro releases for a fresh directional impetus.

Haresh Menghani FXStreet

The AUD/USD pair managed to recover around 22 pips from one-and-half-week lows touched earlier this Monday and was last seen trading near daily tops, just above mid-0.7300s.

Despite worries about the fast-spreading Delta variant and a global economic slowdown, the prevalent risk-on environment extended some support to the perceived riskier Australian dollar. This, in turn, was seen as a key factor that assisted the AUD/USD pair to find some support near the 0.7335 region on the first day of a new week. That said, a strong pickup in the US dollar demand might hold bulls from placing aggressive bets and keep a lid on any further gains for the major.

In fact, the key USD Index shot to two-week tops during the first half of the trading action on Monday amid expectations for an imminent Fed taper announcement later this year. The market speculations were further fueled by Philadelphia Fed President Patrick Harker's comments on Monday, who joined a chorus of policymakers keen to trim $120 billion in monthly bond purchases. This, along with the recent spike in the US Treasury bond yields, acted as a tailwind for the greenback.

The yield on the benchmark 10-year US government bond climbed back closer to the 1.35% threshold on Friday following the release of the US Producer Price Index (PPI). The PPI recorded the largest gain since November 2010 and indicated that higher inflation could persist for some time. Hence, the focus now shifts to the latest US consumer inflation figures, due for release on Tuesday.

Apart from this, traders, this week, will further take cues from important Chinese macro releases, Australian employment details and the US monthly Retail Sales figures. The data will now play a key role in influencing the AUD/USD pair ahead of the crucial FOMC monetary policy meeting on September 2021. In the meantime, the USD price dynamics and the broader market risk sentiment might produce some trading opportunities amid absent relevant market-moving economic data on Monday.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7359
Today Daily Change	0.0002
Today Daily Change %	0.03
Today daily open	0.7357

Trends
Daily SMA20	0.7308
Daily SMA50	0.7362
Daily SMA100	0.753
Daily SMA200	0.7609

Levels
Previous Daily High	0.741
Previous Daily Low	0.7348
Previous Weekly High	0.7469
Previous Weekly Low	0.7345
Previous Monthly High	0.7427
Previous Monthly Low	0.7106
Daily Fibonacci 38.2%	0.7371
Daily Fibonacci 61.8%	0.7386
Daily Pivot Point S1	0.7333
Daily Pivot Point S2	0.7309
Daily Pivot Point S3	0.7271
Daily Pivot Point R1	0.7396
Daily Pivot Point R2	0.7434
Daily Pivot Point R3	0.7458

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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