AUD/USD finds some support near 0.7100, remains well offered amid stronger USD/risk-off

AUD/USD witnessed heavy selling on Friday and moved further away from a three-week high.
Rising bets for a 50 bps Fed rate hike continued underpinning the USD and exerted pressure.
The risk-off mood also contributed to driving flows away from the perceived riskier aussie.

Haresh Menghani FXStreet

The AUD/USD pair recovered a few pips from the daily low and was last seen trading around the 0.7130-0.7125 region, still down over 0.50% for the day.

The pair extended the overnight sharp pullback from the vicinity of mid-0.7200s, or a three-week high and witnessed heavy follow-through selling on the last day of the week. The US dollar gained strong positive traction and remained well supported by firming expectations for a faster policy tightening by the Fed. This, along with the risk-off impulse, further weighed on the perceived riskier aussie and contributed to the heavily offered tone surrounding the AUD/USD pair.

The red-hot US consumer inflation figures released on Thursday reinforced speculations that the Fed will adopt a more aggressive policy stance and bets for a 50 bps rate hike in March. Adding to this, St. Louis Fed President James Bullard called for 100 bps rate hikes over the next three FOMC policy meetings. This, in turn, pushed the yield on the benchmark 10-year US government bond beyond the 2.0% threshold for the first time since August 2019 and underpinned the buck.

The selloff in the bond markets triggered a fresh bout of the global risk-aversion trade, which was evident from a generally weaker tone across the equity markets. This, in turn, forced investors to take refuge in traditional safe-haven assets and further benefitted the greenback. However, retreating US bond yields capped gains for the USD and assisted the AUD/USD pair to find some support near the 0.7100 round-figure mark, though the attempted recovery lacked follow-through.

Market participants now look forward to the US economic docket, featuring the release of the Prelim University of Michigan US Consumer Sentiment Index. This, along with the US bond yields, will drive the USD demand and provide a fresh impetus to the AUD/USD pair. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7127
Today Daily Change	-0.0037
Today Daily Change %	-0.52
Today daily open	0.7164

Trends
Daily SMA20	0.714
Daily SMA50	0.7167
Daily SMA100	0.7249
Daily SMA200	0.7368

Levels
Previous Daily High	0.725
Previous Daily Low	0.7147
Previous Weekly High	0.7168
Previous Weekly Low	0.6985
Previous Monthly High	0.7315
Previous Monthly Low	0.6966
Daily Fibonacci 38.2%	0.7187
Daily Fibonacci 61.8%	0.7211
Daily Pivot Point S1	0.7124
Daily Pivot Point S2	0.7084
Daily Pivot Point S3	0.7021
Daily Pivot Point R1	0.7227
Daily Pivot Point R2	0.729
Daily Pivot Point R3	0.7329

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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