- AUD/USD fell more than 0.50%, to a daily low near 0.6380.
- Jerome Powell opened the door to another hike in this tightening cycle.
- Rising US yields make the USD gain interest.
At the end of the week, the USD gained ground against its rivals, mainly driven by the Federal Reserve’s (Fed) chairman, Jerome Powell, at the Jackson Hole Symposium. On the Aussie side, no relevant data or events are on the docket in Friday’s session.
Jerome Powell’s speech at the Jackson Hole Symposium sounded hawkish. He stated that the economy didn’t cool down as expected and that the Fed will proceed “carefully” for the next decisions. He then pointed out that “there is no way to know what the neutral rate would be,” and markets are betting higher odds of another hike in 2023.
According to the CME FedWatch tool, the odds of a 25 basis points (bps) hike in November rose to nearly 44% vs. 33% a week ago. The odds of a pause remain high in September while investors are betting on cuts in June-July 2024.
As a reaction, the US Treasury yield rose, with the 2,5 and 10-year rates rising to 5.07%, 4.46% and 4.25%, respectively, giving the USD a boost.
AUD/USD Levels to watch
Based on the daily chart, it is evident that AUD/USD leans toward a bearish outlook in the short term. The Relative Strength Index (RSI) remains below its midline in negative territory, showcasing a southward slope. Similarly, the Moving Average Convergence Divergence (MACD) exhibits red bars, emphasising the strengthening bearish momentum for AUD/USD. Also, the pair is below the 20,100 and 200-day Simple Moving Averages (SMAs), implying that the bears retain control on a broader scale.
Support levels: 0.6380, 0.6370 (cycle low), 0.6350.
Resistance levels: 0.6435, 0.6480, 0.6500 (20-day SMA).
AUD/USD Daily chart
-638285764423120784.png)
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
Gold falls amid a possible de-escalation of US-China tensions Premium
Gold pulled back from its all-time high of $3,500 per troy ounce reached earlier on Tuesday, as a resurgent US Dollar and signs of easing tensions in the US–China trade dispute appeared to draw sellers back into the market.
EUR/USD retreats to daily lows near 1.1440
EUR/USD loses the grip and retreats to the 1.1440 zone as the Greenback’s rebound now gathers extra steam, particulalry after some positive headlines pointing to mitigating trade concerns on the US-China front on Tuesday.
GBP/USD deflates to weekly lows near 1.3350
GBP/USD loses further momentum and recedes to the 1.3350 zone on Tuesday, or two-day troughs, all in response to the frmer tone in the US Dollar and encouraging news from the US-China trade scenario.
Ethereum rallies 10% amid decline in CME short positions
Ethereum saw a 10% gain on Tuesday after the general crypto market rallied alongside Bitcoin. The rally comes after the ETH Chicago Mercantile Exchange basis plunged from 20% in November to about 5% in April.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.