• AUD/USD trims a part of its strong intraday gains to the highest level since August.
  • The risk-off impulse benefits the safe-haven USD and caps the risk-sensitive Aussie.
  • Bets for further rate hikes by the RBA should limit any deeper pullback for the pair.

The AUD/USD pair retreats nearly 50 pips from its highest level since mid-August touched earlier this Wednesday and is currently placed around the 0.7075 area, still up over 0.40% for the day.

A fresh wave of the global risk-aversion trade drives some haven flows towards the US Dollar and turns out to be a key factor acting as a headwind for the risk-sensitive Aussie. The market sentiment remains fragile amid worries about the economic headwinds stemming from the worst yet COVID-19 outbreak in China. Apart from this, the protracted Russia-Ukraine war has been fueling recession fears and tempers investors' appetite for perceived riskier assets.

The global flight to safety, along with the prospects for a less aggressive policy tightening by the Fed, exert some downward pressure on the US Treasury bond yields. In fact, the CME's FedWatch Tool points to over a 90% probability for a smaller 25 bps rate hike at the next FOMC meeting that concludes on February 1. This could keep a lid on any meaningful upside for the Greenback and help limit any meaningful corrective pullback for the AUD/USD pair.

Moreover, the stronger Australian consumer inflation figures released earlier this Wednesday gives the Reserve Bank of Australia (RBA) reasons to keep raising interest rates. This should further contribute to limiting the downside for the AUD/USD pair. Hence, any subsequent pullback might still be seen as a buying opportunity, warranting some caution for bearish traders in the absence of any relevant market-moving economic releases from the United States (US).

Technical levels to watch

AUD/USD

Overview
Today last price 0.7074
Today Daily Change 0.0032
Today Daily Change % 0.45
Today daily open 0.7042
 
Trends
Daily SMA20 0.689
Daily SMA50 0.6792
Daily SMA100 0.6646
Daily SMA200 0.6816
 
Levels
Previous Daily High 0.7058
Previous Daily Low 0.6993
Previous Weekly High 0.7064
Previous Weekly Low 0.6872
Previous Monthly High 0.6893
Previous Monthly Low 0.6629
Daily Fibonacci 38.2% 0.7033
Daily Fibonacci 61.8% 0.7018
Daily Pivot Point S1 0.7005
Daily Pivot Point S2 0.6967
Daily Pivot Point S3 0.694
Daily Pivot Point R1 0.7069
Daily Pivot Point R2 0.7096
Daily Pivot Point R3 0.7134

 

 

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