AUD/USD defends 0.7100 on downbeat yields, mixed Aussie trade data


  • AUD/USD stays mildly bid, consolidates recent losses around yearly low.
  • Australia Trade Balance, Exports improve in October but Imports contract further.
  • Market sentiment dwindles as mixed Fed signals confront Omicron woes ahead of pre-Fed trading lull.
  • US Weekly Jobless Claims, virus updates can entertain intraday traders.

AUD/USD prints mild gains around 0.7110, snapping a six-day downtrend near 2021 bottom during Thursday’s Asian session. The Aussie pair’s latest consolidation could be linked to the softer Treasury yields and mixed trade numbers from home.

Australia Trade Balance grew past 11000M forecast to 11220M in October, versus 12243M prior. The details suggest that the Imports shrank more than -2.0% previous release to -3.0% whereas Exports improved to -3.0% from -6.0% prior. Additionally, Home Loans dropped below -1.0% market consensus and -2.7% previous reading to -4.1% whereas Investment Lending for Homes eased to 1.1% versus 1.4% printed the last.

Read: Aussie Trade Balance Oct: A$11.22B vs est A$11.150B; Aussie firm

Following the data, AUD/USD prices remain mildly bid around the intraday high as traders await Friday’s US Nonfarm Payrolls (NFP) after recently mixed signals from the Fed Chair Jerome Powell weighed down the Treasury yields.

That said, the US 10-year Treasury yields stay pressured near a two-month low surrounding 1.40% by the press time whereas the S&P 500 Futures print 0.40% intraday gains after the Wall Street benchmarks marked second consecutive daily loss.

Federal Reserve (Fed) Chairman Jerome Powell reiterated his inflation fears but also said he still believes inflation will come down “meaningfully” in the second half of 2022, during testimony against a Senate Commission. On the contrary, Federal Reserve Bank of New York President John C. Williams said, per New York Times, that Omicron could prolong supply and demand mismatches, causing some inflation pressures to last.

The virus woes recently spread into the US after the first Omicron case pushed President Joe Biden’s administration to extend the rules for wearing a mask in public transit. “US President Joe Biden's administration will extend requirements for travelers to wear masks on airplanes, trains and buses and at airports and train stations through mid-March to address ongoing COVID-19 risks,” said Reuters quoting anonymous sources.

Given the mixed concerns over inflation and a 10-week low of the US inflation expectations, per the 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, risk appetite is likely to rely on the virus update for fresh impulse. However, the AUD/USD prices are expected to portray a sluggish move amid a lack of major data and the generally observed pre-NFP trading lull.

Read: US nonfarm payrolls take center stage after Powell’s hawkishness

Technical analysis

AUD/USD remains bearish until defying a downward sloping trend channel from late October, between 0.7190 and 0.7075 at the latest. Adding to the upside filter is the 50-SMA and 23.6% Fibonacci retracement (Fibo.) of late October to November downside, around 0.7175-80.

Additional important levels

Overview
Today last price 0.711
Today Daily Change 0.0015
Today Daily Change % 0.21%
Today daily open 0.7095
 
Trends
Daily SMA20 0.7265
Daily SMA50 0.7334
Daily SMA100 0.7333
Daily SMA200 0.7507
 
Levels
Previous Daily High 0.7174
Previous Daily Low 0.7094
Previous Weekly High 0.7273
Previous Weekly Low 0.7111
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7125
Daily Fibonacci 61.8% 0.7143
Daily Pivot Point S1 0.7068
Daily Pivot Point S2 0.7041
Daily Pivot Point S3 0.6988
Daily Pivot Point R1 0.7148
Daily Pivot Point R2 0.7201
Daily Pivot Point R3 0.7228

 

 

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

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD falls below 1.1300 as dollar keeps its strength ahead of Fed

EUR/USD is trading in the negative territory below 1.1300 on Wednesday as markets wait for the FOMC to announce its policy decisions following its two-day meeting. The US Dollar Index holds above 96.00 ahead of the American session, supported by the modest recovery seen in US Treasury bond yields. 

EUR/USD News

GBP/USD holds above 1.3500 for now on improving sentiment

GBP/USD is posting modest daily gains above 1.3500, supported by the positive shift seen in market sentiment. The UK's FTSE 100 Index is rising more than 1.5% and S&P Futures are up 2.4% ahead of the Fed's policy announcements. 

GBP/USD News

Gold on the defensive below $1,850, focus remains on FOMC

A combination of factors dragged gold away from over two-month high touched on Tuesday. A recovery in the risk sentiment, Fed rate hike bets acted as a headwind for the commodity.

Gold News

Dogecoin short squeeze will launch DOGE to $0.25

Dogecoin price has been on a wild ride over the past few weeks. After gaining more than 50% between January 11 and January 15, DOGE dropped a further 44% to print new nine-month lows. 

Read more

Bank of Canada Rate Decision Preview: No surprises for a 25bps rate hike Premium

BOC to keep the overnight rate steady at 0.25% at its first policy meeting of 2022. A surprise 25-bps rate hike cannot be ruled out amid hotter Canadian inflation, labor market. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures