- AUD/USD staged a modest bounce from multi-month lows and snapped five days of losing streak.
- A positive risk tone undermined the safe-haven USD and benefitted the perceived riskier aussie.
- COVID-19 jitters might hold bulls from placing aggressive bets and cap the upside for the major.
The AUD/USD pair held on to its recovery gains heading into the European session and was last seen trading near daily tops, just above mid-0.7100s.
Having defended the 0.7100 mark on Friday, the AUD/USD pair staged a goodish rebound from the lowest level since November 2020 and snapped five consecutive days of the losing streak. A generally positive tone around the equity markets led to some follow-through US dollar profit-taking slide and was seen as a key factor that benefitted the perceived riskier aussie.
The worsening COVID-19 situations continued fueling worries about the potential economic fallout from the fast-spreading Delta variant. This now seems to have forced investors to push back expectations that the Fed will begin to roll back its pandemic-era stimulus. This, in turn, was seen as another factor that continued undermining the greenback on Monday.
The supporting factors, to a larger extent, helped offset weaker Australian PMI prints for August and drove the AUD/USD pair higher through the first half of the trading action on Monday. However, persistent COVID-19 jitters might hold investors from placing aggressive bullish bets, warranting some caution before confirming that the pair has bottomed out.
Market participants might also be reluctant, rather prefer to wait on the sidelines ahead of Fed Chair Jerome Powell's speech at the Jackson Hole Symposium later this week. In the meantime, Monday's release of the flash US PMIs, along with the broader market risk sentiment will be looked upon for some short-term trading opportunities around the AUD/USD pair.
Technical levels to watch
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
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.