AUD/USD plunges below 0.7000 on a buoyant greenback

The Australian dollar prepares to finish the week with losses of almost 1.60%.
Fluctuating sentiment in the FX space boosts the USD and weighs on the AUD.
St. Louis Fed President Bullard: Achieving a soft landing is feasible.

Christian Borjon Valencia FXStreet

AUD/USD plummets from weekly highs reached on Thursday around 0.7069, down below the 0.7000 mark, after Wednesday’s afternoon Federal Reserve rate hike, which initially lifted the major to fresh weekly highs above 0.7000. However, Friday’s overall US Dollar strength brought the pair down. At 0.6930, the AUD/USD is down 1.58% and will finish the week with losses close to 1.58%.

The mixed mood in the FX complex weighs on the AUD and boosts the USD

US equities are trading barely in the green in a choppy trading session. The Australian dollar is the third weakest currency of the day in the FX complex, while the buck is recovering some ground. The US Dollar Index, a gauge of the buck’s value vs. a basket of six peers, is gaining 0.95%, currently at 104.785.

The AUD/USD remains weak due to falling commodity prices. Also, additional Covid-19 Chinese lockdowns loom. China’s is Australia biggest trading partner, so any slowdown in its economy would hurt the Australian dollar outlook dramatically.

The lack of Australian economic data left AUD/USD traders adrift to the US calendar. US Industrial Production rose by 5.8% YoY, less than April’s 6.3%, adding to signs of economic slowdown.

Elsewhere, Fed speakers begin to dominate headlines. Minneapolis Fed Neil Kashkari said that he supported 75 bps in June and could support another in July. He added that a prudent strategy might be to continue with 50 bps increases. St. Louis Fed President James Bullard said a soft landing is feasible if the post-pandemic shift is done well.

Key Technical Levels

AUD/USD

Overview
Today last price	0.6930
Today Daily Change	-0.0122
Today Daily Change %	-1.73
Today daily open	0.7053

Trends
Daily SMA20	0.7113
Daily SMA50	0.715
Daily SMA100	0.7222
Daily SMA200	0.7244

Levels
Previous Daily High	0.707
Previous Daily Low	0.6942
Previous Weekly High	0.7248
Previous Weekly Low	0.7036
Previous Monthly High	0.7267
Previous Monthly Low	0.6828
Daily Fibonacci 38.2%	0.7021
Daily Fibonacci 61.8%	0.6991
Daily Pivot Point S1	0.6973
Daily Pivot Point S2	0.6894
Daily Pivot Point S3	0.6846
Daily Pivot Point R1	0.7101
Daily Pivot Point R2	0.7149
Daily Pivot Point R3	0.7228

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.