AUD/USD: Consolidates heaviest drop in a month above 0.7600 even as risk-off prevails


  • AUD/USD bounces off monthly low, flashed recently, amid short-covering move.
  • Fedspeak, virus-led lockdown and Western tussle with China weigh on sentiment, Flooding in NSW exerts additional downside pressure.
  • Preliminary readings of Commonwealth Bank PMIs can offer immediate direction but risk catalysts keep the driver’s seat.

AUD/USD picks up bids to 0.7630, off recently flashed monthly low, during the early Wednesday’s Asian session trading. The pair dropped the most since February 26 the previous day as multiple catalysts, ranging from Fed to coronavirus (COVID-19) and geopolitics, hurt market sentiment. Given the lack of decisive data, except for second-tier activity numbers, bears can keep the reins and look challenges to risks for fresh impulse.

Beaten from all the corners…

Be it the Fed policymakers’ mixed comments or the flooding in New South Wales (NSW), not to forget virus-led lockdowns in Europe and Western tussle with Beijing, AUD/USD had a beating from all the corners.

Talking about the Fedspeak, Chairman Jerome Powell kept his cautious optimism while defending the stimulus whereas Dallas Federal Reserve President Robert Kaplan tuned too hawkish by signaling rate hikes in 2022. Further, Federal Reserve Governor Lael Brainard and St. Louis Fed President James Bullard offered mixed signals relating to the economy. Elsewhere, Treasury Secretary Janet Yellen shrugged off tax-hike fears but couldn’t impress the markets.

Elsewhere, Australia's worst floods in nearly half a century, per Reuters, in the NSW as well as fights between the Western allies and China over human rights violations in Xinjiang also weigh on the mood. Furthermore, extended virus-led lockdown in Germany and Netherlands is an extra burden on the market sentiment.

Against this backdrop, Wall Street benchmarks turned south whereas the US 10-year Treasury yield dropped six basis points (bps) to retest a one-week low around 1.62% by the end of Tuesday’s North American session.

Moving on, preliminary readings of March month Aussie PMIs from the Commonwealth Bank of Australia (CBA) can offer immediate direction but major attention will be given to the risk catalysts mentioned above for fresh direction. Given the strength of the risk-off mood, coupled with the break of key short-term support, AUD/USD is likely to remain depressed for a while.

Technical analysis

While a clear break of a three-month-old ascending trend line portrayed the heaviest AUD/USD drop in a month, 100-day SMA currently challenges the bears around 0.7600. Hence, a corrective pullback towards the previous support line near 0.7670 can’t be ruled out unless the quote holds 0.7600, a break of which will eye the yearly bottom around 0.7560.

Additional important levels

Overview
Today last price 0.7626
Today Daily Change -0.0120
Today Daily Change % -1.55%
Today daily open 0.7746
 
Trends
Daily SMA20 0.7771
Daily SMA50 0.7743
Daily SMA100 0.7605
Daily SMA200 0.736
 
Levels
Previous Daily High 0.7758
Previous Daily Low 0.7704
Previous Weekly High 0.785
Previous Weekly Low 0.7698
Previous Monthly High 0.8008
Previous Monthly Low 0.7562
Daily Fibonacci 38.2% 0.7737
Daily Fibonacci 61.8% 0.7725
Daily Pivot Point S1 0.7714
Daily Pivot Point S2 0.7682
Daily Pivot Point S3 0.766
Daily Pivot Point R1 0.7768
Daily Pivot Point R2 0.779
Daily Pivot Point R3 0.7822

 

 

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.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD skyrockets to 1.2150 on poor US jobs figures

EUR/USD has hit a new multi-month peak above 1.2150 after the US reported an increase of only 266,000 jobs in April against nearly one million expected. The dollar is under immense pressure. 

EUR/USD News

GBP/USD soars toward 1.40 after disappointing Nonfarm Payrolls

GBP/USD has been extending its gains after the US Nonfarm Payrolls badly disappointed with an increase of only 266,000 jobs in April, nearing 1.40. Earlier, sterling benefited from the UK Conservative Party's gains in local elections. 

GBP/USD News

XAU/USD soars above $1,835 after weak Nonfarm Payrolls

Gold has leaped above $1,835 after the US reported an increase of only 266K jobs in April, far below expectations. Lower US yields support the precious metal.

Gold News

Judge reaffirms order SEC must produce documents on Bitcoin, Ether and XRP in Ripple case

Ripple's victory granted the firm access to the SEC's documents on the three leading cryptocurrencies. The regulatory agency recently denied the possession of these documents.

More Dogecoin News

S&P 500 and Nasdaq: Can the Fed pump anymore after weak jobs report

Well, that was an interesting jobs report. Not too many people were forecasting that one. Just in case you missed it NFP were forecast to come in around the 1 million jobs gained but instead the US only added 266k.

Read more

Forex MAJORS

Cryptocurrencies

Signatures