- AUD/USD breaks lower amid a mixed market mood.
- US-China talks and Australian covid woes weigh on the spot.
- A broadly subdued US dollar limits the downside in the aussie.
AUD/USD is breaking its consolidative mode to the downside in the Asian session, losing the midpoint of the 0.7300 level, as the risk-off mood intensifies amid tensions surrounding the US-China talks and looming covid worries in Australia.
The market mood is worsening, with S&P 500 futures extending losses below 4,400, as US-Sino trade talks get underway. China's Vice Foreign Minister Xie Feng said that the standstill in US-Sino relations was due to some people in America treating Beijing as an "imaginary enemy”.
Further, Australia sees no relief from the Delta covid variant flareups while Goldman Sachs predicts that the Sydney covid lockdown is likely to persist until September., as the US bank revises down its Australian Q3 GDP forecast.
Meanwhile, a broadly subdued US dollar and retreating Treasury yields offer no support to the aussie bulls, as a test of the 0.7300 level appears inevitable going forward. Later in the day, the US New Homes Sales data will provide some fresh trading impetus.
Investors could keep an eye on the US-China trade talks and the covid developments ahead of Wednesday’s FOMC decision, where the Fed is likely to throw some hawkish hints on tapering, possibly in the final quarter of this year.
AUD/USD: Technical levels
“In the 4-hour chart, the pair is pressuring a mildly bullish 20 SMA, while the longer moving averages head firmly lower above the current level. Technical indicators retreat, with the Momentum nearing its 100 level and the RSI already within negative levels. Support levels: 0.7330 0.7290 0.7260. Resistance levels: 0.7400 0.7440 0.7475,” FXStreet’s Chief Analyst, Valeria Bednarik notes.
AUD/USD: Additional levels
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.
Recommended content
Editors’ Picks
AUD/USD could extend the recovery to 0.6500 and above
The enhanced risk appetite and the weakening of the Greenback enabled AUD/USD to build on the promising start to the week and trade closer to the key barrier at 0.6500 the figure ahead of key inflation figures in Australia.
EUR/USD now refocuses on the 200-day SMA
EUR/USD extended its positive momentum and rose above the 1.0700 yardstick, driven by the intense PMI-led retracement in the US Dollar as well as a prevailing risk-friendly environment in the FX universe.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Bitcoin price makes run for previous cycle highs as Morgan Stanley pushes BTC ETF exposure
Bitcoin (BTC) price strength continues to grow, three days after the fourth halving. Optimism continues to abound in the market as Bitcoiners envision a reclamation of previous cycle highs.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Federal Reserve might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.