• AUD/USD consolidates recent losses around yearly low, pauses five-week downtrend.
  • Yields improve, S&P 500 futures rise amid hopes of further easy money, Omicron cure.
  • China’s Premier promised RRR cut, RBA can cite softer inflation, coronavirus woes to maintain status-quo.
  • Second-tier Aussie data came in positive for November, Australia Treasurer Frydenberg stays optimistic.

AUD/USD prints mild gains while taking rounds to 0.7010-15 during Monday’s Asia session, licking its wounds following the heaviest daily fall since early May.

While the Fed-linked chatters dragged the Aussie pair to fresh 2021 lows, optimism concerning Australia’s economy, the hope of the People’s Bank of China’s (PBOC) rate cut and preparations for tomorrow’s Reserve Bank of Australia (RBA) meeting seem to favor bulls of late. On the same line could be the cautious optimism in the market.

Ahead of the RBA meeting, Bloomberg came out with the survey stating, “Australia’s central bank is likely to highlight the interval between building economic momentum and faster price gains as well as renewed risks from a new coronavirus variant in its final meeting of the year.”

On the other hand, the ANZ said, “China’s Premier Keqiang promised a Reserve Requirement Ratio (RRR) cut to the International Monetary Fund (IMF), without specifying the date, – on the same day Evergrande filed a warning of default risk and possible restructuring.”

Read: China's 10y govt yield drops 5bps to 2.85% amid bets on RRR cut

In addition to the RBA and the PBOC chatters, upbeat prints of the second-tier data at home also favored AUD/USD prices. That said, Australias’ TD Securities Inflation for November rose past 0.2% to 0.3% whereas the ANZ Job Advertisements came in at 7.4% versus 6.2% prior for the stated month.

Additionally, hopes of finding a cure to the South African covid variant, dubbed as Omicron, joins chatters that the same is less dangerous than initially feared also favored the market sentiment and the AUD/USD prices. After initially hitting Europe and the UK, the virus strain tightens its grip towards reaching the key global nations like the US and China. It should be noted, however, that global scientists are optimistic over the cure. Recently, US top Medical Officer Anthony Fauci backed Pfizer’s drug to be effective against Omicron while the news of chewing gum to stop the virus spread and the UK’s push for treatment also keeps traders hopeful.

Furthermore, comments from Australia’s Treasurer Josh Frydenberg were positive for the AUD/USD prices. The policymaker is likely to revise the Aussie GDP forecast for 2022 during the mid-year budget update, per Reuters.

It’s worth noting that the quote dropped heavily on Friday as the US dollar shrugged off a surprise drop in the US Nonfarm Payrolls (NFP) while trading the improvement in the Unemployment Rate. Also keeping the Fed rate hike expectations on the front were comments from St Louis Fed President James Bullard who is also a voting member in 2022. The policymakers said, “Could look at raising interest rates before completing the taper.”

Amid these plays, S&P 500 futures print 0.45% intraday gains and the US 10-year Treasury yields gained 4.2 basis points (bps) to 1.378% by the press time. Wall Street benchmarks closed negative while the US 10-year Treasury yields dropped around 10 basis points (bps) to 1.35%, the lowest since late September, on Friday.

Moving on, risk catalysts and the pre-RBA sentiment may drive AUD/USD prices amid a light calendar.

Technical analysis

Having successfully broken August 2021 low, AUD/USD sellers attack November 2020 low that holds the key for the pair’s further declines toward 50% retracement of the 2018-20 south-run, around 0.6820. MACD conditions are the most bearish in two months as 100-DMA teases a bear cross under 200-DMA, suggesting further weakness of the Aussie pair.

However, the RSI conditions are nearly oversold and hence corrective pullback can’t be ruled out as well. The same highlights 61.8% Fibonacci level of 0.7130 and convergence of the stated key weekly moving averages, near 0.7190-7200, as short-term targets to watch during the quote’s recovery.

Additional important levels

Overview
Today last price 0.702
Today Daily Change 0.0016
Today Daily Change % 0.23%
Today daily open 0.7004
 
Trends
Daily SMA20 0.723
Daily SMA50 0.7325
Daily SMA100 0.7326
Daily SMA200 0.75
 
Levels
Previous Daily High 0.7102
Previous Daily Low 0.6993
Previous Weekly High 0.7174
Previous Weekly Low 0.6993
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7035
Daily Fibonacci 61.8% 0.706
Daily Pivot Point S1 0.6964
Daily Pivot Point S2 0.6924
Daily Pivot Point S3 0.6855
Daily Pivot Point R1 0.7073
Daily Pivot Point R2 0.7142
Daily Pivot Point R3 0.7182

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

Disappointing Australian data and a deteriorated market mood weighed on AUD/USD, quickly approaching the 2022 low at 0.6362. RBA’s Financial Stability report coming up next.

AUD/USD News

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

The American dollar maintains a strong upward momentum amid renewed inflation and recession concerns. EUR/USD further retreated after failing to regain parity mid-week.

EUR/USD News

Gold struggling to retain its bullish strength

Gold struggling to retain its bullish strength

XAUUSD shed some ground on Thursday, currently hovering around $1,713.00. The dollar has gathered momentum as Wall Street opened in the red, holding into negative territory at the time. Also, government bond yields resumed their advances and hold near fresh weekly highs.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

The crypto market displays mixed signals but hints that the bearish trend is not over yet. Adopting a get-in-get-out mentality may be the more favorable approach for investors looking to expose themselves to the market.

Read more

US September NFP Preview: Analyzing gold's reaction to NFP surprises Premium

US September NFP Preview: Analyzing gold's reaction to NFP surprises

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair's reaction to the previous 26 NFP prints.

Read more

Forex MAJORS

Cryptocurrencies

Signatures