AUD/USD defends 0.7600 amid risk-off mood, US dollar comeback


  • Aussie sellers returned on Wednesday as the DXY rebounded amid a risk-off mood. 
  • Treasury yields pushed higher amid dovish FOMC minutes
  • US jobless claims. Fed Chair Powell’s speech awaited on Thursday.  

AUD/USD is defending the 0.7600 mark, as the US dollar holds onto its recovery gains amid a negative close on Wall Street and a rebound in the Treasury yields across the curve.  

At the time of writing, the aussie trades flat at 0.7611, having tested the 0.7600 threshold following a sell-off that was triggered after repeated rejection near 0.7680 levels.

The risk-off market mood, in the wake of fading hopes of a sooner Fed rate hike, doubts over the strength of the US economic recovery and a renewed uptick in the Treasury yields, lifted the sentiment around the dollar at the expense of the riskier assets such as the aussie dollar.

The recovery in the Treasury yields also dulled AUD/USD’s attractiveness as an alternative higher-yielding asset. The benchmark 10-year US rates jumped nearly 1.40% to test the 1.68% level.

The FOMC March meeting’s minutes offered no new surprises, although reiterated the bank’s dovish stance on the monetary policy, in the wake of the ongoing risks of the coronavirus pandemic. The Fed minutes read: “Participants agreed that the economy remained far from the (Fed’s) longer-run goals and that the path ahead remained highly uncertain.”      

Meanwhile, markets paid little heed to the comments from US President Joe Biden on his $2.25 trillion infrastructure plan, which is likely opposed by the Republicans. US Republican Senator Mitch McConnell said that “maybe a way forward on an infrastructure bill that does not change 2017 tax cuts.”

Looking ahead, attention turns towards Thursday’s US weekly jobless claims and speech by the Fed Chair Jerome Powell at a virtual International Monetary Fund (IMF) Seminar. In the meantime, the US dollar price action and dynamics in yields will continue to play out.

AUD/USD: Technical levels to consider

AUD/USD

Overview
Today last price 0.7611
Today Daily Change -0.0048
Today Daily Change % -0.63
Today daily open 0.766
 
Trends
Daily SMA20 0.768
Daily SMA50 0.7717
Daily SMA100 0.7644
Daily SMA200 0.74
 
Levels
Previous Daily High 0.767
Previous Daily Low 0.7605
Previous Weekly High 0.7694
Previous Weekly Low 0.7531
Previous Monthly High 0.785
Previous Monthly Low 0.7562
Daily Fibonacci 38.2% 0.7645
Daily Fibonacci 61.8% 0.763
Daily Pivot Point S1 0.762
Daily Pivot Point S2 0.758
Daily Pivot Point S3 0.7555
Daily Pivot Point R1 0.7685
Daily Pivot Point R2 0.771
Daily Pivot Point R3 0.775

 

 

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