AUD/USD clings to gains near multi-month top, comfortably above 0.6900 amid weaker USD


  • AUD/USD gains traction for the second straight day and rallies to its highest level since late August.
  • A combination of factors weighs heavily on the greenback and remains supportive of the move up.
  • Looming recession risks might hold back bulls from placing fresh bets and cap any further gains.

The AUD/USD pair builds on Friday's strong rally and gains strong follow-through traction on the first day of a new week. This marks the second successive day of a positive move and lifts spot prices closer to mid-0.6900s, or the highest since late August during the first half of the European session.

A combination of factors continues to weigh heavily on the US Dollar, which, in turn, is seen acting as a tailwind for the AUD/USD pair. The mixed US monthly jobs report (NFP) and the disappointing release of the US ISM Services PMI on Friday fueled speculations that the Fed will soften its hawkish stance. In fact, the markets are now pricing in a 25 bps Fed rate hike move in February. This leads to a further decline in the US Treasury bond yields and undermines the buck. Apart from this, the upbeat market mood exerts additional pressure on the safe-haven greenback and benefits the risk-sensitive Australian Dollar.

China pivoted away from the strict zero-COVID policy and opened its borders over the weekend for the first time in three years. This, in turn, boosted investors' confidence, is evident from a generally positive tone around the equity markets and is seen denting the USD's relative safe-haven status. That said, worries that the massive flow of Chinese travellers may cause another surge in COVID infections might keep a lid on any further optimism in the markets. Apart from this, the protracted Russia-Ukraine war, along with concerns about a deeper global economic downturn, could lend some support to the buck and cap the AUD/USD pair.

Traders might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of the release of the high-anticipated US consumer inflation figures on Thursday. The crucial US CPI could influence the US central bank's near-term policy outlook and provide a fresh directional impetus to the greenback. Nevertheless, sustained strength and acceptance above the 0.6890-0.6900 region support prospects for a further appreciating move for the AUD/USD pair. Hence, any meaningful pullback could be seen as a buying opportunity and remain limited.

Technical levels to watch

AUD/USD

Overview
Today last price 0.6918
Today Daily Change 0.0034
Today Daily Change % 0.49
Today daily open 0.6884
 
Trends
Daily SMA20 0.6755
Daily SMA50 0.6684
Daily SMA100 0.6635
Daily SMA200 0.6846
 
Levels
Previous Daily High 0.6887
Previous Daily Low 0.6722
Previous Weekly High 0.6887
Previous Weekly Low 0.6688
Previous Monthly High 0.6893
Previous Monthly Low 0.6629
Daily Fibonacci 38.2% 0.6824
Daily Fibonacci 61.8% 0.6785
Daily Pivot Point S1 0.6775
Daily Pivot Point S2 0.6666
Daily Pivot Point S3 0.661
Daily Pivot Point R1 0.694
Daily Pivot Point R2 0.6996
Daily Pivot Point R3 0.7104

 

 

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

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD continues to trade in a relatively tight channel at around 1.0750 in the American session on Wednesday. The pair struggles to finding direction with US markets remaining closed in observance of the Juneteenth Holiday.

EUR/USD News

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD clings to modest daily gains above 1.2700 on Wednesday. The data from the UK showed that annual inflation, as measured by the change in the Consumer Price Index, declined to 2% in May from 2.3% in April. The BoE will announce policy decisions on Thursday.

GBP/USD News

Gold: What’s up with XAU/USD?

Gold: What’s up with XAU/USD?

Gold (XAU/USD) struggles to capitalize on the previous day's bounce from the vicinity of the $2,300 mark and oscillates in a narrow band near $2,330. US bond markets remain closed in observance of the Juneteenth Holiday, limiting the pair's volatility.

Gold News

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon price formed a bullish divergence on a momentum indicator, signaling a reversal. On-chain data shows MATIC’s capitulation event occurred between June 12 and 18.

Read more

Investors' focus will be on Europe

Investors' focus will be on Europe

In the euro area, the EU commission will reveal against which countries it recommends opening an excessive deficit procedure (EDF) due to breaches of the EU fiscal rules.

Read more

Forex MAJORS

Cryptocurrencies

Signatures