- AUD/USD retreats from daily top as bulls struggle to keep the bounce off one-week low.
- RBA Minutes reiterated readiness to be patient, cited achievement of goals within sight for the first time in several years.
- Market sentiment sours amid Ukraine-Russia chatters, hawkish Fedspeak.
- US data, Fedspeak will add burden to the watchers’ list, risk catalysts are the key.
AUD/USD steps back from intraday high to 0.7130 as RBA Minutes fail to support the pair’s early Asian session corrective pullback during Tuesday. Also challenging the Aussie pair buyers is the weaker risk appetite amid Russia-linked headlines and Fedspeak, due to the quote’s risk barometer status.
That said, the latest Minutes of the Reserve Bank of Australia (RBA) monetary policy meeting stated, “Members observed that the achievement of the goals was within sight for the first time in several years.” However, the comments line, “Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve,” challenged AUD/USD buyers.
Read: RBA minutes: Members observed that inflation had picked up more quickly than the bank had expected
On the other hand, headlines covering Russian Foreign Minister Sergey Lavrov initially helped the markets to stay optimistic over no imminent fears of the Russia-Ukraine war, as he showed likes for the US proposals. However, comments like, “EU and NATO responses have not been satisfactory,” kept the risk-off mood high.
Also challenging the market sentiment were comments from St. Louis Fed President James Bullard who repeated his call for 100 basis points (bps) in interest rate hikes by July 1 by citing the last four inflation reports which show broadening inflationary pressures.
Amid these plays, the US Treasury yields consolidate the previous day’s recovery moves with the fresh drop to 1.979%, down 1.7 basis points (bps) whereas S&P 500 Future print mild losses at the latest. On Monday, the bond coupons regained upside momentum after stepping back from a 2.5-year high on Friday whereas the Wall Street benchmark closed in the red, despite mildly positive week-start performance.
Having witnessed the initial market reaction to the RBA Minutes, AUD/USD pair traders will keep their eyes on the risk catalysts. Also important will be, the US Producer Price Index (PPI) for January, expected 9.1% YoY versus 9.7% prior, as well as the Empire State Manufacturing Index for February, bearing the market consensus of 12 versus -0.7% previous readouts.
Technical analysis
The 21-DMA and previous support line from January 28, respectively around 0.7135 and 0.7160, restrict the short-term upside of the AUD/USD prices ahead of the key 100-DMA resistance surrounding 0.7245.
Meanwhile, 0.7080 and the 0.7000 threshold may entertain short-term sellers.
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
GBP/USD rises above 1.3300 after UK Retail Sales data
GBP/USD trades with a positive bias for the third straight day on Friday and hovers above the 1.3300 mark in the European morning on Friday. The data from the UK showed that Retail Sales rose at a stronger pace than expected in August, supporting Pound Sterling.
USD/JPY keeps BoJ-led losses below 142.50, Ueda's presser eyed
USD/JPY remains in the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.
Gold consolidates weekly gains, with sight on $2,600 and beyond
Gold price is looking to build on the previous day’s rebound early Friday, consolidating weekly gains amid the overnight weakness in the US Dollar alongside the US Treasury bond yields. Traders now await the speeches from US Federal Reserve monetary policymakers for fresh hints on the central bank’s path forward on interest rates.
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum
Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.