AUD/USD keeps the red below 0.7500 mark, seems vulnerable near weekly low

AUD/USD added to the previous day’s heavy losses and dropped to a fresh weekly low.
The Fed’s hawkish outlook, a softer risk tone underpinned the USD and exerted pressure.
Retreating US bond yields capped the upside for the USD and helped limit deeper losses.

Haresh Menghani FXStreet

The AUD/USD pair maintained its offered tone through the first half of the European session and was last seen hovering near the weekly low, around the 0.7475 region.

The pair witnessed some follow-through selling for the second successive day on Thursday and extended this week's sharp retracement slide from the highest level since June 2021, around the 0.7660 area. The US dollar stood tall near a two-year high touched on Tuesday amid the Fed's hawkish outlook, which, in turn, was seen as a key factor that exerted downward pressure on the AUD/USD pair.

In fact, the minutes from the March 15-16 FOMC meeting released on Wednesday showed that policymakers were prepared to hike interest rates by 50 bps amid concerns that inflation had broadened through the economy. The minutes also showed general agreement over the need to reduce the central bank’s massive balance sheet at a maximum pace of $95 billion per month to tighten financial conditions.

The Fed's aggressive plans, along with fading hopes for a diplomatic solution to end the war in Ukraine, weighed on investors' sentiment. This was evident from a fresh leg down in the equity markets, which further benefitted the safe-haven buck and drove flows away from the perceived riskier Australian dollar. That said, retreating US Treasury bond yields capped the upside for the greenback.

Apart from this, a hawkish commentary by the Reserve Bank of Australia, along with rising commodity prices, helped limit deeper losses for the resources-linked aussie, at least for now. It is worth recalling that the RBA dropped its pledge to be patient on tightening policy and noted that the domestic economy remains resilient, and spending is picking up following the omicron setback.

Nevertheless, acceptance below the 0.7500 psychological mark favours suggests that the AUD/USD pair has topped out in the near-term and supports prospects for an extension of the corrective slide. Traders now look forward to the US Weekly Initial Jobless Claims data, which, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the AUD/USD pair.

Technical levels to watch

AUD/USD

Overview
Today last price	0.7477
Today Daily Change	-0.0043
Today Daily Change %	-0.57
Today daily open	0.752

Trends
Daily SMA20	0.7431
Daily SMA50	0.7285
Daily SMA100	0.7233
Daily SMA200	0.7298

Levels
Previous Daily High	0.7594
Previous Daily Low	0.7486
Previous Weekly High	0.7541
Previous Weekly Low	0.7455
Previous Monthly High	0.7541
Previous Monthly Low	0.7165
Daily Fibonacci 38.2%	0.7527
Daily Fibonacci 61.8%	0.7553
Daily Pivot Point S1	0.7472
Daily Pivot Point S2	0.7425
Daily Pivot Point S3	0.7364
Daily Pivot Point R1	0.7581
Daily Pivot Point R2	0.7642
Daily Pivot Point R3	0.7689

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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