- AUD/USD gained some traction on Friday and staged a modest recovery from 11-year lows.
- A sharp turnaround in the global risk sentiment benefitted perceived riskier Australian dollar.
- Rebounding US bond yields provided an additional boost to the USD and capped further gains.
The AUD/USD pair extended its sideways consolidative price and remained confined in a narrow trading band, around the 0.6300 round-figure mark.
A combination of diverging factors failed to provide any meaningful impetus, or assist the pair to build on its attempted intraday recovery move and led to a subdued/range-bound price action through the mid-European session on Friday.
A strong recovery in the global risk sentiment, as depicted by solid gains across the global equity markets, was seen as one of the key factors extending some support to perceived riskier currencies, including the Australian dollar.
Investors' confidence got a strong boost on the last trading day of the week after the Bank of Japan (BoJ) on injected 500 billion yen into the system via an unscheduled repo operation and later announced an unscheduled buying of JGBs.
This comes on the back of the Fed's announcement on Thursday, saying that it will inject $1.5 trillion of temporary liquidity into the short-term funding markets and was seen as one of the key factors behind the pair's early recovery from over 11-year lows.
Meanwhile, the risk-on flows pushed the benchmark S&P 500 to an intraday up limit of 5% and led to a goodish pickup in the US Treasury bond yields. This eventually helped the US dollar to add to the overnight strong gains and kept a lid on any further recovery.
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further near-term recovery amid concerns over the coronavirus outbreak.
Technical levels to watch
|Today last price||0.6303|
|Today Daily Change||0.0067|
|Today Daily Change %||1.07|
|Today daily open||0.6236|
|Previous Daily High||0.6492|
|Previous Daily Low||0.6213|
|Previous Weekly High||0.6658|
|Previous Weekly Low||0.6465|
|Previous Monthly High||0.6775|
|Previous Monthly Low||0.6434|
|Daily Fibonacci 38.2%||0.632|
|Daily Fibonacci 61.8%||0.6386|
|Daily Pivot Point S1||0.6135|
|Daily Pivot Point S2||0.6034|
|Daily Pivot Point S3||0.5855|
|Daily Pivot Point R1||0.6415|
|Daily Pivot Point R2||0.6594|
|Daily Pivot Point R3||0.6695|
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.