|

AUD/USD consolidates in a range above mid-0.7800s, highest since late February

  • AUD/USD lacked any firm direction and remained confined in a range on Monday.
  • A USD benefitted from a goodish pickup in the US bond yields and capped gains.
  • The downside remains cushioned amid dovish Fed expectations, the risk-on mood.

The AUD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range around mid-0.7800s, or the highest level since February 26.

A combination of factors failed to assist the pair to capitalize on last week's strong positive move, instead led to a subdued/range-bound price action on the first day of a new trading week. Against the backdrop of strained relations between China and Australia, softer aussie retail sales data acted as a headwind for the AUD/USD pair. This, along with a modest US dollar rebound, capped the upside for the major.

The USD found some support from a goodish pickup in the US Treasury bond yields, though lacked any bullish conviction amid dovish Fed expectations. Friday's disappointing US monthly jobs report reaffirmed market speculations that the Fed will keep interest rates low for a longer period. This, in turn, held the USD bulls from placing aggressive bets and extended some support to the AUD/USD pair, at least for now.

In fact, the headline NFP showed that the economy added only 266K new jobs in April. This was well below consensus estimates pointing to a reading of nearly one million. Adding to this, the previous month's reading was also revised down to 770K from 916K reported earlier and the unemployment rate unexpectedly edged higher to 6.1% from 6.0% in March.

Apart from this, the underlying bullish sentiment in the financial markets further helped limit any meaningful decline for the perceived riskier aussie. Even from a technical perspective, acceptance above the 0.7815-20 heavy supply zone supports prospects for an additional near-term appreciating move. Hence, a subsequent strength towards the 0.7880-85 intermediate hurdle, en-route the 0.7900 mark, looks a distinct possibility.

In the absence of any major market-moving economic releases from the US, the US bond yields will play a key role in influencing the USD price dynamics. Apart from this, the broader market risk sentiment might further contribute to producing some short-term trading opportunities around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price0.7854
Today Daily Change0.0010
Today Daily Change %0.13
Today daily open0.7844
 
Trends
Daily SMA200.7742
Daily SMA500.771
Daily SMA1000.7712
Daily SMA2000.748
 
Levels
Previous Daily High0.7863
Previous Daily Low0.776
Previous Weekly High0.7863
Previous Weekly Low0.7674
Previous Monthly High0.7819
Previous Monthly Low0.7531
Daily Fibonacci 38.2%0.7824
Daily Fibonacci 61.8%0.78
Daily Pivot Point S10.7782
Daily Pivot Point S20.772
Daily Pivot Point S30.768
Daily Pivot Point R10.7885
Daily Pivot Point R20.7925
Daily Pivot Point R30.7987

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

EUR/USD weakens below 1.1900, USD remains firm

EUR/USD has slipped back into its downtrend, drifting below the 1.1900 support as the US Dollar’s recovery keeps gathering traction. Indeed, the Greenback’s push higher gathered pace after President Trump named Kevin Warsh as Jerome Powell’s successor and US Producer Prices rose more than expected in December.

GBP/USD retreats further, threatens 1.3700

Selling pressure remains on the rise, dragging GBP/USD back towards three-day lows around 1.3720-1.3710 at the end of the week. Cable’s retracement reflects a firmer rebound in the Greenback as investors digest Trump’s announcement of the next Fed chair.

Gold remains offered just above $5,000

Gold is extending its pullback, managing to trim part of its strong losses and regain the $5,000 mark and beyond on Friday. The precious metal’s severe drop comes amid broad-based profit-taking across the commodity space, alongside a firmer US Dollar and mixed US Treasury yields.

Stellar deepens correction, slipping to 3-month low as risk-off mood persists

Stellar continues to trade in the red, slipping below $0.20 on Friday, a level not seen since mid-October. Bearish sentiment intensifies amid falling Open Interest and negative funding rates in the derivatives market. On the technical side, weakening momentum indicators support further correction in XLM.

Microsoft sell-off etches $400 billion hole in market, second highest on record

Microsoft's (MSFT) post-earnings cratering on Thursday sent other indices into pullback mode despite the narrow nature of its weakness.

Top 3 Price Prediction: Bitcoin, Ethereum, Ripple deepen sell-off as bears take control of momentum

Bitcoin, Ethereum, and Ripple continued their corrections on Friday, posting weekly losses of nearly 6%, 3%, and 5%, respectively. BTC is nearing the November lows at $80,000, while ETH slips below $2,800 amid increasing downside pressure.