AUD/USD holds steady near weekly tops, lacks follow-through


  • Upbeat Australian GDP report assisted AUD/USD to gain some traction on Wednesday.
  • An uptick in the US bond yields underpinned the USD and capped gains for the major.
  • Investors now look forward to the US economic docket for some trading opportunities.

The AUD/USD pair held on to its modest gains through the early European session and was last seen hovering near weekly tops, around the 0.7830 region.

The pair edged higher during the early part of the trading action on Wednesday and was supported by a better-than-expected Australian Q4 GDP report. In fact, the economy expanded by 3.1% during the October-December period and the previous quarter's reading was also revised higher to 3.4% from 3.3% estimated previously.

Adding to this, the underlying bullish tone in the equity markets extended some additional support to the perceived riskier aussie. However, a modest US dollar uptick – amid a fresh leg up in the US Treasury bond yields – held bulls from placing aggressive bets and kept a lid on any further gains for the AUD/USD pair.

The US Treasury bond yields have been a key focal point in the financial markets amid the upbeat US economic outlook. The impressive pace of coronavirus vaccinations and the progress on a massive US fiscal spending plan has been fueling expectations for a relatively stronger US economic recovery from the pandemic.

The reflation trade further forced investors to price in a possible uptick in inflation and raised doubts that the Fed would retain ultra-low interest rates for a longer period. This extended some additional support to the greenback and warrants some caution before positioning for any further gains for the AUD/USD pair.

Market participants now look forward to the releases of the ADP report on private-sector employment and ISM Services PMI from the US. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader market risk sentiment might further contribute to produce some trading opportunities around the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price 0.7829
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 0.7828
 
Trends
Daily SMA20 0.7773
Daily SMA50 0.7725
Daily SMA100 0.7513
Daily SMA200 0.7298
 
Levels
Previous Daily High 0.7838
Previous Daily Low 0.7736
Previous Weekly High 0.8008
Previous Weekly Low 0.7692
Previous Monthly High 0.8008
Previous Monthly Low 0.7562
Daily Fibonacci 38.2% 0.7799
Daily Fibonacci 61.8% 0.7775
Daily Pivot Point S1 0.7763
Daily Pivot Point S2 0.7698
Daily Pivot Point S3 0.766
Daily Pivot Point R1 0.7865
Daily Pivot Point R2 0.7903
Daily Pivot Point R3 0.7968

 

 

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