AUD/USD eases from one-week top, holds above 0.7100 mark amid weaker USD


  • AUD/USD struggled to preserve/capitalize on its early move to a one-week high.
  • Rising geopolitical tensions acted as a headwind for the perceived riskier aussie.
  • Retreating US bond yields undermined the USD and could help limit the downside.

The AUD/USD pair surrendered its intraday gains to a one-week high and was last seen hovering near the lower end of its daily trading range, around the 0.7120-15 region.

The pair built on this week's strong recovery from the lowest level since November 2020 and gained some follow-through traction during the early part of the trading action on Wednesday. The uptick was supported by a modest US dollar weakness, though lacked follow-through buying and ran out of steam ahead of mid-0.7100s.

Relations between the US and Russia took a turn for the worse after US President Joe Biden threatened to impose economic and other measures on Russia if it invades Ukraine. This, in turn, kept a lid on the recent optimistic move in the financial markets and acted as a headwind for the perceived riskier Australian dollar.

Meanwhile, reviving safe-haven demand led to a fresh leg down in the US Treasury bond yields, which undermined the US dollar and helped limit the downside for the AUD/USD pair. That said, the prospects for a faster policy tightening by the Fed support prospects for the emergence of some USD dip-buying and warrant caution for bulls.

The markets have been pricing in the possibility for an eventual Fed liftoff in May 2022 amid worries about the persistent rise in inflationary pressures. Hence, the focus shifts to the release of the US CPI report on Friday, which will influence the Fed's policy outlook and provide a fresh directional impetus to the AUD/USD pair.

In the meantime, the US bond yields will drive the USD demand and produce some short-term trading opportunities around the AUD/USD pair. Apart from this, traders will further take cues from geopolitical developments and the broader market risk sentiment amid absent relevant market moving economic releases from the US.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7121
Today Daily Change 0.0004
Today Daily Change % 0.06
Today daily open 0.7117
 
Trends
Daily SMA20 0.7198
Daily SMA50 0.7318
Daily SMA100 0.7321
Daily SMA200 0.7492
 
Levels
Previous Daily High 0.7124
Previous Daily Low 0.7038
Previous Weekly High 0.7174
Previous Weekly Low 0.6993
Previous Monthly High 0.7537
Previous Monthly Low 0.7063
Daily Fibonacci 38.2% 0.7091
Daily Fibonacci 61.8% 0.7071
Daily Pivot Point S1 0.7062
Daily Pivot Point S2 0.7008
Daily Pivot Point S3 0.6977
Daily Pivot Point R1 0.7148
Daily Pivot Point R2 0.7179
Daily Pivot Point R3 0.7233

 

 

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