- AUD/USD consolidates the recovery above 0.7450 amid USD pullback.
- The aussie remains weighed down by the Australian covid concerns.
- Focus remains on Fed Chair Powell’s testimony for fresh direction.
Having found strong bids near 0.7435, AUD/USD took a flight, now consolidating the bounce above 0.7450 amid a cautious market mood.
On Tuesday, hotter-than-expected US inflation data spooked markets, downing the global stocks while boding well for the greenback. The spot fell as low as 0.7427 on the US CPI release.
The risk sentiment continues to remain sour heading into the Fed Chair Jerome Powell’s testimony this Wednesday, as markets expect Powell to hint at a likely monetary policy normalization, given the inflation surge.
The recovery in the risk-sensitive aussie, therefore, appears at risk, although the recent retracement in the greenback has offered some respite to the AUD bulls. The ongoing uptick in the currency pair can be also associated with the advance in gold price, which underpins the resource-linked aussie.
In the day ahead, the dollar’s price action amid Treasury yields dynamics will continue to influence the aussie. Meanwhile, investors remain concerned about the rapid spread of the Delta covid variant in Australia, with seven news cases reported in Melbourne while Sydney battles the highly contagious outbreaks.
AUD/USD technical levels
The AUD/USD pair is poised to extend its decline in the near term. The 4-hour chart shows that it is currently developing below all of its moving averages, as technical indicators head south within negative levels. The pair posted a yearly low at 0.7409 last week, with a break below the level favoring a continued decline towards the 0.7250/60 price zone. Support levels: 0.7410 0.7370 0.7320. Resistance levels: 0.7490 0.7530 0.7570, explains Valeria Bednarik, FXStreet’s Chief Analyst.
AUD/USD additional 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
AUD/USD holds gains near 0.7000 amid PBOC's status-quo, Gold price surge
AUD/USD is clinging to mild gains near 0.7000 early Monday. The pair benefits from a risk-on market profile, China's steady policy rates and surging Gold and Copper prices. Focus now remains on Fedspeak for fresh impetus.
Gold eyes $2,450 and Fedspeak for a sustained uptrend
Gold price is off a new lifetime high at $2,441 but looks to extend Friday’s upswing at the start of the week on Monday. The US Dollar is struggling alongside the US Treasury bond yields, as risk sentiment remains in a sweeter spot on China’s stimulus measures.
EUR/USD gains ground above 1.0850, focus on Fedspeak
The EUR/USD pair trades on a stronger note around 1.0875 on Monday during the early Asian trading hours. The uptick in the major pair is bolstered by the softer Greenback. The Federal Reserve’s Bostic, Barr, Waller, Jefferson, and Mester are scheduled to speak on Monday.
AI tokens could really ahead of Nvidia earnings
Native cryptocurrencies of several blockchain projects using Artificial Intelligence could register gains in the coming week as the market prepares for NVIDIA earnings report.
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.