AUD/USD clings to gains near 0.7035-40 area, focus shifts to RBA decision on Tuesday


  • The risk-on impulse prompted some short-covering around the perceived riskier aussie.
  • Hawkish Fed expectations underpinned the USD and might cap the upside for AUD/USD.
  • Investors now look forward to the RBA decision on Tuesday for some meaningful impetus.

The AUD/USD pair maintained its bid tone through the mid-European session and was last seen hovering near the top end of its daily trading range, around the 0.7035-40 region.

Having shown some resilience below the key 0.7000 psychological mark, the AUD/USD pair witnessed some short-covering on Monday and recovered a part of the previous day's losses to a fresh YTD low. The global risk sentiment stabilized a bit in reaction to reports from South Africa, suggesting that Omicron patients only had relatively mild symptoms. This, in turn, led to a strong recovery in the equity markets and benefitted the perceived riskier aussie.

The upbeat market mood got an additional boost after the People’s Bank of China (PBOC) slashed the bank's Reserve Requirement Ratio (RRR) by 50bps, releasing 1.2 trillion-yuan long-term liquidity. Despite the supporting factors, the uptick lacked bullish conviction amid the prevalent bullish sentiment surrounding the US dollar. The prospects for a faster policy tightening by the Fed acted as a tailwind for the greenback and might cap gains for the AUD/USD pair.

Investors seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation and have been pricing in the possibility of liftoff by May 2022. Apart from this, rebounding US Treasury bond yields favours the USD bulls. This, in turn, makes it prudent to wait for a strong follow-through buying before confirming that the AUD/USD pair has formed a near-term base and positioning for any further appreciating move.

There isn't any major market-moving economic data due for release from the US, leaving the USD at the mercy of the US bond yields. Apart from this, developments surrounding the coronavirus saga and the broader market risk sentiment will influence the USD price dynamics. This should provide some impetus to the AUD/USD pair ahead of the RBA policy decision on Tuesday.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7037
Today Daily Change 0.0033
Today Daily Change % 0.47
Today daily open 0.7004
 
Trends
Daily SMA20 0.723
Daily SMA50 0.7325
Daily SMA100 0.7326
Daily SMA200 0.75
 
Levels
Previous Daily High 0.7102
Previous Daily Low 0.6993
Previous Weekly High 0.7174
Previous Weekly Low 0.6993
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7035
Daily Fibonacci 61.8% 0.706
Daily Pivot Point S1 0.6964
Daily Pivot Point S2 0.6924
Daily Pivot Point S3 0.6855
Daily Pivot Point R1 0.7073
Daily Pivot Point R2 0.7142
Daily Pivot Point R3 0.7182

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

AUD/USD bounces back from five-month lows

AUD/USD bounces back from five-month lows

AUD/USD ends its three-day decline on Wednesday, bouncing back from levels not seen since mid-November. Nevertheless, hawkish remarks from Federal Reserve officials and the influx of safe-haven flows could bolster the US Dollar and potentially limit the upside of pair in the short term.

AUD/USD News

USD/JPY trades with mild losses below 155.00 on risk-aversion

USD/JPY trades with mild losses below 155.00 on risk-aversion

USD/JPY trades with mild losses near 154.65 on Wednesday during the early Asian trading hours. The robust US economy and sticky inflation data have triggered the expectation that the Fed might delay the easing cycle to September from June, which provides some support to the US Dollar.

USD/JPY News

Gold ascends but remains shy of testing $2,400 amid hawkish Fed remarks

Gold ascends but remains shy of testing $2,400 amid hawkish Fed remarks

Gold prices edged higher late in North American session, gaining 0.22% following a hawkish tilt by Fed Chair Jerome Powell. Economic data from the United States was mixed, though Monday’s Retail Sales report and Powell’s remarks kept US Treasury yields higher, capping the yellow metal’s advance.

Gold News

Fetch.ai Price Prediction: FET must hold above $1.70 for strength

Fetch.ai Price Prediction: FET must hold above $1.70 for strength

Fetch.ai is trading with a bearish bias. It comes as chatter about the proposed integration with the Ocean Protocol and the SIngularityNET ecosystem remains fresh.

Read more

UK CPI March Preview: Inflation pressures to dissipate further, adding to bets of BoE rate cuts

UK CPI March Preview: Inflation pressures to dissipate further, adding to bets of BoE rate cuts

The March UK CPI report will be released by the Office for National Statistics on Wednesday. United Kingdom’s headline and core annual inflation are set to ease in March. The UK CPI report could hint at the BoE’s interest rate cut, rocking the Pound Sterling.

Read more

Forex MAJORS

Cryptocurrencies

Signatures