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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.

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